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Free Money: The Surprising Effects of a Basic Income Supplied by Government (wired.com)
56 points by stevekemp 30 days ago | hide | past | web | favorite | 89 comments



This is very interesting, but is it not also worth noting that the community allowed this money is very controlled? The idea of a basic income is that everyone gets it, regardless of where you live in the country, and other factors. My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it, along with people from all over the world wanting into the system. For a small population of native Americans, it seems to work very very well, but I don't think it's sustainable for an entire country.


Another problem that I see is that it will very quickly become "not basic" in that we might give everyone $2,000 a month, but then quickly politicians will advocate for certain constituents to get more. "People who work as teachers in poor neighborhoods should get an extra $500 a month" or "People who have been convicted of X Y or Z crime should get $500 less for the rest of their lives".


We might also see the same thing that's happened with minimum wage and student loans. (where basic income no longer covers even the basics)


Right, that's IMHO the biggest problem with BI schemes, and it gets little attention: we don't have a good grasp on the dynamics behind why (certain) prices go up to gobble up every gain in income or government grant.

It's illustrated well in Churchill's story about the do-gooders who bought out a bridge and lifted the toll, only to find that rents went up by the exact cost of regularly crossing the bridge.

http://www.landvaluetax.org/current-affairs-comment/winston-...

(Search for "bridge".)

If rents just advance to capture the BI, all you've done is give a big subsidy to landowners.


> we don't have a good grasp on the dynamics behind why (certain) prices go up to gobble up every gain in income or government grant.

We actually do, both when it is driven by rational (e.g., shifting money into a monopolized market) and irrational (encouraging time-deferred costs that people are known empirically to discount) forces.

> If rents just advance to capture the BI, all you've done is give a big subsidy to landowners.

But they can't, because UBI is a redistributive scheme; without price discrimination based on income before both UBI and the taxes funding it, you can't adjust rents to capture it.


>We actually do, both when it is driven by rational (e.g., shifting money into a monopolized market) and irrational (encouraging time-deferred costs that people are known empirically to discount) forces.

"It's driven by rational and irrational forces" isn't an explanation.

>But they can't, because UBI is a redistributive scheme; without price discrimination based on income before both UBI and the taxes funding it, you can't adjust rents to capture it.

So you're saying the bridge scenario didn't and can't happen?


> "It's driven by rational and irrational forces" isn't an explanation.

Nor was it posed as one, it is your condensation of my description (which also includes specific examples in each category) of broad classes of sources which we understand very well that produce the described effect.

> So you're saying the bridge scenario didn't and can't happen?

I was not saying anything about the bridge scenario, which is structurally unlike a UBI and thus a non-useful analogy. Though, sure, I would say that the bridge example reads a lot like more like a parable than a historical account, and politicians constructing such parables with weak, if any, factual basis is about as uncommon as ocean spray containing salt. More to the point, it's exactly about one f the specific examples I gave of effects we understand quite well.


The bridge example is economically equivalent to not buying out the bridge but giving everyone the amount necessary to pay daily tolls. Why wouldn’t rents go up (in either scenario)?

Do you deny generally that rents go up with public infrastructure? Or that lifting a toll would raise rents (because it now becomes a more desirable place to live)? Or, which supply/demand curves do you think differ here from the UBI case?


> The bridge example is economically equivalent to not buying out the bridge but giving everyone the amount necessary to pay daily tolls. Why wouldn’t rents go up (in either scenario)?

They would go up; but, absent a perfect monopoly (which real property available for rent is usually not subject to in even the short term), it would be unlikely to go up the exact amount of the subsidy (considering only the effect of the subsidy).

> Or, which supply/demand curves do you think differ here from the UBI case?

The difference is that its a lot more plausible for residential rental property in a particular locality to be effectively monopolized than for that to be the national norm. And, to the extent the effect is under consideration is real, it is explicitly a monopoly effect.


From my point of view, people who push for basic income also tend to push for things such as rent control. They see wealth/capital consolidation as a bad thing to ban.


Yes, well, as long as it covers the basics somewhere. Someone living on only basic income won't be able to afford to live in Manhattan. They'll have to move to rural Alabama.


But that's the thing: you can do that today: live minimally for a year at big-city wages, then buy a trailer in rural Alabama. If people don't consider that a viable option now, neither will they with any feasible basic income level.


Maybe you still can't live in Manhattan but I don't really see the point in a UBI so low that you can't afford to live in a city at all.


I think helping with the economic development of smaller areas would be a huge benefit in and of itself. But basic income opens up really revolutionary ideas beyond this. Imagine you get 10,000 people together and the income is set to something quite low - $1000 a month. That's $10 million a month that, if a moderate sized group of people were willing to coordinate and work together, could be used to build new cities and developments from the ground up.

In a way a basic income can almost be seen as a decentralization of government as it enables citizens to direct government funded spending at their discretion.


I had never thought about it like this. This makes so much sense.


Good point. Another for the mix that I think someone may have already touched on, and that is if you're low income, and if business, etc. knows the government is giving you a basic income, then they'll just raise prices to offset that income. Kind of like the arguments against raising the minimum wage.


> My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it

This same logic applies to corporate welfare as well - and you can see the results (see latest tax bill).

The differentiating factor is that, in one case you give to those without much political power vs. giving to those who have enough power to play havoc with your politics (or have already controlled/captured it).

A bit of perspective helps to balance the slippery slope danger you presented.


It's also worth noting that these payments are funded by casino revenue for that very small population.

This article would look very different if some members of the tribe were taxed heavily to provide the payments to other members.


> My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it...

Edmund Burke famously made this argument in the 18th century as an example of a problem with universal franchise (letting non-property owners vote). Supposedly the "masses" would vote for more and more handouts.

Personally, I think the universal franchise has worked out pretty well overall, and this problem has, if anything, gone the wrong way even during the big bouts of progressivism in the late 19th and early 20th centuries.

And even when they went overboard as they did in the UK, they recovered, perhaps over-recovered. But in the long run it seems to converge fine.


It would probably require either isolationism or a true global government, and neither of those are feasible or desirable. That's undoubtedly why our economies tend to be mixed because basic income in a place like America would require too much sacrifice to sustain in the long term. This is going to become more of a challenging problem as humans become obsolete. Before an actual post-scarcity society, we will need government provided basic income, which is simultaneously a scary thought if we don't solve a bunch of other global problems first.


>My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it

How is this a problem? If enough people support an increase in the UBI that politicians feel they have to raise it, isn't that a good thing?


When do you stop raising it?

If people could vote themselves more money the voter turnout would be insane. How would anyone control something like that? Anyone who ran against the increases would be easily defeated with something like this: "My opponent wants to take the money you deserve!".

At some point you would be giving people more money than you produce as a country and then it's only a matter of time until the money runs out. Once the money runs out then your government will evaporate as the enraged populace tries to pin the blame on one group.

This of course is on of the central issues with government run wealth redistribution programs, nobody wants less money and they will go to the polls to protect it. Whatever you think of the ACA/Obamacare in the US, once it got established and started paying out there is almost no way to repeal it as no one wants to lose their benefits. Even establishment Republicans learned their lesson and are now leaving it alone after seeing that they angered many Americans who enjoyed those benefits and threatened their chances of being re-elected.


>If people could vote themselves more money the voter turnout would be insane. How would anyone control something like that? Anyone who ran against the increases would be easily defeated with something like this: "My opponent wants to take the money you deserve!".

Yeah, that seems mostly fine to me though (aside from the rhetoric.) If an increase in UBI makes life meaningfully better for enough people and they turn out to increase it that seems like democracy in action.

>At some point you would be giving people more money than you produce as a country and then it's only a matter of time until the money runs out. Once the money runs out then your government will evaporate as the enraged populace tries to pin the blame on one group.

Seems pretty hyperbolic.


I apologize for the hyperbolic tone of my earlier post, I meant to approach this from more of a thermodynamic angle, ie. money in versus money out.

You cannot continually raise the UBI, as this is economically untenable, however there will be significant pressure to raise it every time there is a vote. I haven't seen any UBI proposal that addresses this.

Plus there is another real issue with a true UBI: inflation. If everyone in the US made $100,000 a year then an iPhone would cost $8000 instead of $800 as people could afford to pay more and Apple would adjust their price accordingly. How do existing UBI schemes plan to avoid this?


A UBI scheme can't just create value from thin air; it has to come from either taxes or from devaluing the currency by printing more, which is basically a tax by another name.* Given that fact, there must be at least some class of relatively wealthy people who come out worse off, even after their UBI checks. The bigger the check, the larger that class of people. Since those people aren't idiots, they'll apply political counterpressure against raising the rate.

Because there's still the same total amount of money in the system, (inflation adjusted) prices can't go up too much. According to the Econ 101 model, goods with a fixed supply will probably get more expensive since there are more potential customers wanting the same amount of stuff, but goods with an extremely flexible supply will get cheaper, again, because there are more potential customers to spread the fixed costs over.

* There's also a sort-of-UBI variant where the funds come from monetizing some big nationalized resource and distributing the proceeds (e.g. the Alaska Permanent Fund Dividend). In that case the above doesn't apply, but neither does your fear. Since in that case the pool of money is dictated by the market value of the resource the voters can't directly impact how much they'll receive.


"How would anyone control something like that?"

We know empirically (see your comment, for instance) that some people would vote against a raise. That idea that 'people' is unable to control their passions is not supported by history. Not so long ago, basic income was rejected by referendum in Switzerland.

"At some point you would be giving people more money than you produce as a country"

That statement is meaningless. Any country that run his own currency can produce an infinity quantity of it. The real constrain is what real resources are available in the country. If you spent more that what is available the value of money will go down (also know as inflation).


>Any country that run his own currency can produce an infinity quantity of it.

Obviously, but in reality countries only mint more currency according to a strict schedule to avoid destabilizing their economy. UBI has to abide by this otherwise you will do real damage to your economy.

My statement is not without meaning, you cannot pretend that a country will be able to give out more wealth that it actually possesses. Technically, the US is over this threshold, but we have a massive amount of credit that we are able to leverage.

>We know empirically (see your comment, for instance) that some people would vote against a raise. That idea that 'people' is unable to control their passions is not supported by history. Not so long ago, basic income was rejected by referendum in Switzerland.

In regard to Switzerland rejecting UBI I think the issue is once people are dependent on UBI dialing back payouts is near impossible even if it makes the most sense economically.

Educated voters will reject raises, but this is like saying that educated people will not eat in excess of what they need. In reality, America has lots of people who know better but are still overweight because of the dependency cycle it creates.


As an empirical observation, in the US we currently have one group of politicians advocating for a larger safety net and a different group strongly advocating for lower taxes.

Sometimes the bigger safety net people win, taxes go up, and payouts go up. Sometimes the lower taxes people win, taxes go down, and payouts shrink. Eventually these forces hit a stable equilibrium (or a semi-stable "pendulum") and the tax and benefit rates don't seem to explode or contract endlessly.

I don't see any reason to expect that a basic income would be any different.


Sometimes it would need to be raised and sometimes it would need to be lowered. It will, however, always be a politically unpopular position to lower it, even if it needs being done.


I guess I don't see that as really a problem with UBI though. The same is true of the criminal justice system (and lots of other government functions), for example, tons of pressure to increase sentences and basically none to lower them. It seems more like a problem with representative government than anything else.


I suspect the reverse. Once basic income exists there will always be pressure from the top (who don't directly benefit) to reduce it.

In the end it's the classic choice. People want more from the government and they also want to pay less taxes which ends up at a balance point.


I'd like to see a version of "basic employment".

Can't find a job? The government will guarantee you some baseline pay and give you a job and healthcare benefits almost unilaterally. You've still gotta show up and do your work, but you are guaranteed something to do.

It might be cleaning up roads and parks, building trails, washing streets, and planting trees, but it's a basic job that will provide you with enough money to get by.

There would be career counseling, skills-based training, and opportunities to manage other workers. Essentially, an Army without the guns; a group focused on not only improving the public environment, but also the part of the public employed by the program.


You aren't alone. From the article:

> Hughes is no basic income purist. He believes, for instance, that for this economic moonshot to be politically palatable, it would have to be tied to work. “Not just because it seems more intuitive for people,” he says, “but because work is a key source of purpose in our lives.”

The Works Progress Administration and Civilian Conservation Corps are pretty close to what you are describing. Many of the parks, lakes, and stadiums in my town were built under those programs.

A guaranteed paycheck basically creates an incentive to not work very hard. Potential employers didn't look on WPA experience as being a positive thing. A Senate inquiry found that there didn't seem to be much incentive for a supervisor to expect or require good work from the workers.

If there were a way to quantify work to the point where everyone is getting paid for what they are contributing I think something like what you describe could work very well. Maybe the solution is a bunch of non-profit businesses that have the goal of creating jobs and breaking event. I think Good Will stores are supposed to do something like this.


I agree. With the ability afforded by technology to quantify and manage work, I think a modern day equivalent of the WPA could be held to a higher standard than the original WPA.


Imagine something that pays based on the work you do kind of like AWS Mechanical Turk but for physical work that benefits the public in a community. Basically, if someone wants to work, there is always work available. The jobs could be paid at a market rate or, if society wanted to supplement the pay, it could be higher with the idea that investing in someone getting a work history will benefit society in the long run.


Who funds the pool of money that pays for the always open jobs, and who verifies the jobs were completed to satisfaction?


Well, the discussion here was UBI so I guess the same magical pool that UBI would be paid from. :) Seriously though, the money that funds unemployment benefits and some other welfare programs would be a possibility because it seems a program like this should replace some of the money paid out in those programs. If we look back at the WPA program, the community that was benefiting (say they were building a stadium for the high-school) would pay for up to 1/3rd of the cost.

Having a way to easily verify jobs is the hard part. If there is valuable work that can be done by low skill workers that was easy to verify, it seems like the market would have already created these jobs. I guess Mechanical Turk is an example of that happening. On the other hand, I think there are physical jobs that could be done like painting buildings in parks, picking up trash, etc. that would be valuable to a community but where the market is unlikely to create a solution.

In the stuff I've read about the WPA, it sounds like having supervisors who cared about the quality of the work was one of their biggest problems too. On the other hand, Uber, TaskRabbit and others have found ways to quantify and judge the quality of work pretty well, so maybe there are ways to do this that just haven't been tried.


I'd like to see both: a basic job for someone who wanted something to do, and a basic income for everyone.

For me, the goal is not to have everyone engaged in busywork. For me, the goal is to end mandatory work.

Freedom comes not when no one has anything to do, but when everyone gets to do what they want.


This seems like it might have some unintended consequences. First off, it doesn't help people like students who both need to pay rent and also need time to study. Secondly, if the only jobs available to a large segment of the population are low paying jobs in the employ of the federal government, which they don't have any realistic way to opt out of, it starts looking like a form of forced labor like many prisoners are subjected to now.


Students have a number of opportunities available to them in both academic and private settings, so I doubt a significant amount of them would opt into a program like this. Another comment suggested AmeriCorps, which seems to be aimed at students.

As for the second point, I would argue such a situation already exists in the private space. If Walmart is the only employer in your area, and you can't live on SS/Disability/Pension alone, you've got a similar situation -- work for a low wage or go hungry ad infinitum.

A public works program with a mandate to improve both the worker and the public good presents a more attractive alternative to a private corporation with little care for the individual worker.

Prisons, at least the one's I've visited, have no such mandate to improve prisoners, thus the forced labor.


I admit you're right in the sense that it wouldn't be necessarily worse than the situation now. I just don't think it would be a whole lot better.


> it doesn't help people like students who both need to pay rent and also need time to study

What's the issue? You'd work, save money for awhile, then enroll in some school after a few years.

Your forced labor argument makes little sense to me. Particularly this argument: "which they don't have any realistic way to opt out of." Why not? You still have free time with a basic-employment job. Learn a skill in your free-time, and then get a job in that skill.


>Learn a skill in your free-time, and then get a job in that skill.

The real world doesn't work like this - most jobs above entry level require a college degree or some kind of professional certification. If you have kids to feed and rent to pay, that's a hard row to hoe. I know it's possible to somehow get a job based on self-reported self-training but that's rare. If it was that easy why do you suppose there are so many people that are working as dishwashers and cashiers? Maybe you just think they're lazy and stupid?


I've had this thought as well. I call it a "Guaranteed Basic Job". I think it should be the "next rung" on the income ladder. In my opinion, we should always have a GBI safety net and then a GBJ would give you a raise as well as a path to a better job if you want it.


> I'd like to see a version of "basic employment".

That is a clever way to avoid many of the key benefits of basic income, particularly its ability to improve the ability of the labor force to adapt organically by weakening the degree to which present minimal support and retraining for better prospects are at odds.

“Basic employment” may make sense as a solution to temporary economic downturns, where it amounts to simple countercyclical spending; unless the goal is to have an ever growing share of the population economically coerced into being a perpetual involuntary government labor force, it's not a good way of dealing with any long-term need.


One day we'll discover socialism.


You jest, but I think one day we'll discover something that looks a little like socialism, a little like "Star Trek-style" communism, and a little like free market capitalism. And it won't be ideologically driven, but based on all the little experiments that worked combined with all the things that technology and social changes have enabled.

Ideologies are epistemic pathogens.


The USA had the WPA, which did something akin to my proposal. Its budget was 1.3bn in 1935 (23.5bn in 2017), and relative to the US military expenditure (521bn in 2016), it's just not that much money for an incredible amount of public good.

Wikipedia has an excellent page about what the WPA administration accomplished over 8 years -- I think it's an idea worth reviving.


The WPA was an reasonable countercyclical government response to a massive cyclical downturn in private-sector employment.

That's not the problem UBI is intended to address, and the WPA would be an exceedingly poor fit TO UBI’s problem.


Once the marginal costs of all essentials is at or close to 0 we will have a chance.


Imagine how many people stuck in shit jobs with abusive bosses might be able to quit. Just as Obamacare enabled many people, especially those with existing medical problems, to quit the job that tied them to their health insurance.


I agree. Could the basic income payout be at least tied to:

* build your own sustainable house to code in a non-hyper inflated coastal city and keep it maintained/painted according to the local home owner's association CC&R's

* grow your own food sustainably at the local CSA

* don't get into trouble

* (optionally for additional income) teach others how to do the above


Instead of a thousand failed experiments to invent work, minimize our impact on the environment, all of our various shortages from housing to opportunities to basic human dignity... maybe we should address the root cause?

Population. It’s one of those things we all tend to stay the hell away from because in the past attempts to address it have been so toxic, and frankly it’s hard not to see attempts today being toxic. Having said that however, it just adds to the difficulty of the problem, it doesn’t make it any less real, pressing or important. A lot of the problems we have today are the result of having geometric growth in the numbers of people for a sustained period of time.

I’m not proposing a specific solution, I’m nowhere near that bright or compassionate. There are obvious pitfalls to avoid such as eugenics and outright genocide, but beyond that I don’t have any answers. Someone had better before the issue forces itself though, because when that happens we won’t get to choose from the best of the bunch of bad options.


The answer to population growth is poverty reduction, healthcare, education, and free access to birth control.

Developed countries tend to have birth rates below the replacement rate for native born populations.

As much as people like to point out that humans have a problem with understanding exponential growth. There probably just as many people who have a problem extrapolating the growth of dynamic systems without understanding that growth rates are subject to feedback pressure.


The answer to population growth is poverty reduction, healthcare, education, and free access to birth control.

...And how do you manage that for a fractious planet of many billions?


Does something like AmeriCorps fit your description? https://en.wikipedia.org/wiki/AmeriCorps


AmeriCorps seems to be highly targeted at students, with loan deferral and forgiveness programs.

I'd like to see such a program for people who recently got out of jail, for example, or at least an addition to AmeriCorps that targets those individuals.

650,000 people get out of jail every year -- having a strong public works program could help those individuals get back to becoming functioning and contributing members of society.


This exists to a certain extent in some European countries. I heard in Denmark there is also "basic-education", where you get unemployment welfare if you enroll in job training programmes.


That already exists in the form of minimum wage + an economy that isnt bad. Going to that extra step to say that government should provide the job itself is just an admittance of failure that the economy is so bad that there are no good jobs and the gov has failed to provide an environment for them to be created.


Isn't the societal benefit received by public works a key component of the parent's proposal? I don't see how the jobs outlined would be accomplished profitably by a private entity.


I can't help but think that UBI is the modern grain dole[0] and while it sounds like a great idea on the surface and would probably work out great for a number of individuals in the short run... it will also inevitably lead to the use of UBI as an easy political tool for populist leaders to use to come to power, leading to the a further degradation of the republic.

[0] https://en.wikipedia.org/wiki/Cura_Annonae


Doesn't that mean that non-populist politicians should get together and actually implement some form of effective UBI to head off a dangerous and competent populist?


That sounds a lot like Otto von Bismarck [0] . Fearful of the socialists, he tried banning them, but that didn't work. So, instead, he introduced "Soclialism-lite" with improved worker conditions, social benefits, and semi-public medicine.

[0] https://en.wikipedia.org/wiki/State_Socialism_(Germany)


So, socialism (the fear of) improved the live of those people. Sounds like a good deal.


That doesn't really make sense to me... any public policy can be rendered ineffective by subsequent politicians.

So a non-populist politician implements an "effective" UBI policy, but since it's only effective for a short amount of time because things change and people realize later that it's not as fair/effective as they thought... or else you can only pass a compromise bill and it's really not effective at all, but you're told it will be (assuming you keep voting for X!).

I mean, why should everyone get the same amount? Or why should the percentage difference between my UBI this other groups be different by X amount?

Suddenly the UBI is just a new way to target voting blocks with promises of adjustments in their favor... essentially like how the tax code is used politically.

The only way to implement UBI effectively is to implement it a way where it can't be used as a populist political tool ever, which I think is impossible.

The most messed up thing I find about UBI is that it's the solution put forth by companies which are actively avoiding paying taxes through loopholes and havens.

Rather than someone like Zuckerberg thinking "Hmm... maybe I could help impoverished people by spreading my wealth to my employees more evenly and by paying my fair share in corporate/personal taxes to the local/state/federal govt?"

Instead they say "I deserve billions of dollars in personal wealth and to stay competitive (despite my effective monopoly) I must utilize every tax loophole possible and it's up to the government to find some other way to find the revenue to keep my users/employees at a living wage."


That's exactly what's happening right now. It's no coincidence Tech barons are pushing this concept before Congress cracks down.


A grain dole can't be manipulated or inflated away.


Main take-away summarized in the closing paragraph:

"...if anything is to be learned from the Cherokee experiment, it’s this: To imagine that a basic income, or something like it, would suddenly satisfy the disillusioned, out-of-work Rust Belt worker is as wrongheaded as imagining it would do no good at all, or drive people to stop working. There is a third possibility: that an infusion of cash into struggling households would lift up the youth in those households in all the subtle but still meaningful ways Costello has observed over the years, until finally, when they come of age, they are better prepared for the brave new world of work, whether the robots are coming or not."


The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year.

Add to this the fact that basic income takes away, at least some of, the reason to work in the first place, which means that the very foundation of governments paying out basic incomes -- income from taxation -- is affected by paying out basic income. The result is an unstable system with feedback loops, where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income. Predicting this oscillation is essential to making basic income work, and I'm not confident it's possible at all, at least not when we need to be as sure about it as we do when we're talking about money that people need to buy food.


>where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income.

There are problems that need to be solved, but the one you have here you just invented. Government programs don't work like this. They aren't pegged to revenue.

The problem you described with oscillations and feedback loops is exactly one of the primary criticisms of attempts at forcing the government to balance the budget each year.


Government spending does not work like household budgeting. There is no significant reason for revenue and expenditure to be matched over any given period. There is almost literally nothing one can intuit about how government spending works that compares it to households or individual spending.


This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov has less tax revenue but more employment benefits to cover. Unemployment benefits cannot be guaranteed without either expanding the national debt or printing money.

A sane government behavior would be to spend in year n the known tax revenue of year (n-1), and nothing more.


And this is in fact sometimes suggested as one of the key benefits. If an area suddently has a lot of people out of work with no safety net it causes a ripple effect as they curtail their spending massively at local businesses, and the next domino gets toppled.

With unemployment benefit the goverment automatically injects cash into the area to forstall this outcome.


> The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year.

This is only a problem for a government constrained to short-term budget balance (U.S. states largely are for their operating budgets, but the federal government is not.)


The government manages to fund the military and social security and medicare despite the fact that tax returns vary from year to year. It can deficit spend and inflate the currency as needed.

In the very long term, nothing is guaranteed, but there is no basis to believe that the tax base will drop by 50% next year, and ample reason to believe the contrary.


What? The government sets budgets for the long term all the time, even leaving aside the fact that it's pretty able to predict its tax income for the next year.


The bigger problem in my mind is people getting past the Industrial Age idea that you need a "job" to be a worthwhile human being, and that the nature of said "job" determines your value to society.

I don't really mind if there's lots of crappy poetry and tremendous non-enumerative attention to child rearing and looking after the elderly. I don't mind in the slightest if someone decides they just want to watch TV all day à la "Fahrenheit 451".

But in an abundance economy where the marginal cost of production is essentially nil and money is more useful as a signalling mechanism rather than a store of value, it's the mindset that will be most psychologically dangerous.


Whether statistically significant or not, this provides a ray of hope that some of the benefits proponents foresee will be realized and many of the concerns that opponents foresee may not be, respectively, improved outcome for families, versus, reduced participation in the work force:

"Before the casino opened, Costello found that poor children scored twice as high as those who were not poor for symptoms of psychiatric disorders. But after the casino opened, the children whose families’ income rose above the poverty rate showed a 40 percent decrease in behavioral problems. Just four years after the casino opened, they were, behaviorally at least, no different from the kids who had never been poor at all. By the time the youngest cohort of children was at least 21, she found something else: The younger the Cherokee children were when the casino opened, the better they fared compared to the older Cherokee children and to rural whites. This was true for emotional and behavioral problems as well as drug and alcohol addiction.... Other researchers have used Costello’s data to look at different effects of the casino payments. One fear about basic income is that people will be content living on their subsidies and stop working. But a 2010 analysis of the data, led by Randall Akee, who researches labor economics at the UCLA's Luskin School of Public Affairs, found no impact on overall labor participation."


It's pretty remarkable that money apparently cures psychiatric disorders. Maybe we should be prescribing cash instead of ritalin to kids with ADD.


It's about family dynamics. Parents who can focus on providing for and raising their kids will have a better outcome than those those that struggle to put food on the table. If the parents have hope and a means to deliver, the whole outlook of the kids changes from a life of coping with hopelessness to looking towards a future that they have influence over.


I was more making a statement about how those kinds of disorders are over treated with medication when a change in the home environment would make a bigger difference.


> It's pretty remarkable that money apparently cures psychiatric disorders.

Actually, the results are that it reduced the risk of developing such disorders; that there are environmental factors for psychiatric as well as other medical disorders and that many are correlated with poverty and/or economic insecurity is decidedly not news.


I can see how basic income could help some types of people, but it can also hurt other types of people. If only there was a way to determine who it would help/hurt, and then to only give it out when it would actually help.

https://ifstudies.org/blog/what-can-we-learn-from-native-ame...


Extrapolating from the experience of people who were genocided, displaced, systematically oppressed, and excluded from productive economic activity strikes me as likely to be inaccurate.


Basic income based on other's addictions ? I doubt people around here would welcome drug money being redistributed to a close community distinguishing itself from outsiders by blood, but somehow, this is acceptable.

That being said, there is an easy counter argument to this article: Canada's "first nation". They receives millions in government funding which ends up to be redistributed arbitrarily by "band chief's", often in the pocket of their own direct family. It is not uncommon to have their income in the seven figures while other members of their band fall to real vice, drugs and drinking. (facts confirmed by many first nation members when I living on treaty land). Also, it is not uncommon to see natives who tried to integrate with Canadian society being ostracized by their own community and seen as "traitors" (once again, step family experience).


This (and every other article I've read) fails to address how "universal" basic income would result in something other than a proportionate increase in the cost of living.

I don't want my taxes pissed away into some slumlord's bank account any more than I want them pissed away on APCs for a small town police department.


Assuming you believe free markets work (and assuming the UBI is paid for by tax increases instead of just printing more money), the answer to "how universal basic income would result in something other than a proportionate increase in the cost of living" is: that's not how markets work.

Increased demand will result in increased supply except in markets/locations where the supply can't increase.


Facebook and Google should expand the experiment and provide a basic living wage to everyone in San Francisco.

It'll be interesting to see what happens to the homeless population.


Universal basic income is already a thing in America. Free food stamps, free public housing, free k-12 education, free government provided cellphones, free wifi, etc. "Universal basic cash" is what this article is about. No, I don't think its a good idea to give people cold hard cash for basic income




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