Opinion of Universal Basic Income

[Incipimus iterum]

Discuss!

[muon2]

As I understand the traditional idea, the public would get an income based on a "social dividend" from government-owned corporations. If so, the best US example is probably the Alaska Permanent Fund which pays to every Alaskan a dividend from the proceeds of the state's petroleum extraction and other natural resources.

[Santander]

In conjunction with a massive reduction in the welfare state, support. Otherwise, no.

[RFayette]

In conjunction with a massive reduction in the welfare state, support. Otherwise, no.

[Sumner 1868]

A fairly lazy solution to the issue poverty. I find it utterly bizarre that many of the same people who complain of safety net programs "throwing money at problems" support this proposal.

[DC Al Fine]

It's an interesting idea, but it has too many issues to be 'normal, sane etc'. I really like how unintrusive it is compared to traditional forms of aid but it has its problems.

The main issue is that that even a modest minimum income would be hugely expensive, and the clawbacks required to make it affordable would result in ridiculous marginal tax rates for the poor. Even in relatively high tax countries, such a system would be prohibitively expensive. Between that and the implementation issues involved, I think it should be limited to vulnerable populations like families with children, the elderly and disabled.

[Mr. Smith]

Nervously endorsed.

[Torie]

Seems like a grossly inefficient way to create a reasonable social safety net (particularly if as described by Muon2, with the highly questionable assumption that government should be running companies, and that such companies would ever generate a profit), and without any incentives for life style changes. HP.

[jamestroll]

It may be necessary with the advancement of technology. But I do believe that technology destroyign jobs is grossly over stated. I have a lot to write about Universal Basic Incomes and Technology and Jobs.. but I will have to do it later today. Perhaps in a different thread.

[World politics is up Schmitt creek]

Seems like a grossly inefficient way to create a reasonable social safety net (particularly if as described by Muon2, with the highly questionable assumption that government should be running companies, and that such companies would ever generate a profit), and without any incentives for life style changes. HP.

One of the World Bank's findings (certainly not a left-leftist institution) in the case of Brazil's Bolsa Família was that a basic income (albeit not a universal one) actually motivated its recipients to take on more economic risk (implicit in which is more ~entrepreneurship~, et cetera), because they had something simple and easy to understand to fall back on if their ventures failed. I'm also not sure how it's less 'efficient' than the bewildering array of piecemail bits of netting that the United States and many other countries current have.

I'm with DC Al Fine on this, although I don't understand economics and finance nearly as well as he does and, who knows, if I did I might disagree with him.

Voted Freedom Policy, on principle if not necessarily in application.

[Ebowed]

Seems like a grossly inefficient way to create a reasonable social safety net

Eh, the only thing more inefficient than giving poor people money is doing something else.

There are too many examples of "safety net" programs that only become more bloated and less successful as soon as you start removing poor people's direct access to assistance.  (Australia is particularly rife with this sort of thing: the number of publicly funded, privately operated companies making a killing off of "job seekers" while the unemployed languish below the poverty level is beyond comprehension.)

Besides, you let the cat out of the bag when you admit that this is about changing lifestyles, which until you provide more specifics only conjures up pretty negative connotations.

[Beet]

Yes, if you throw in work.

Basically what I would support is, the government subsidizing certain jobs, such as cashier jobs, that normally would be turned over to machines. Instead, the government contributes, say, $18 an hour, the company contributes $9 an hour, and what you are left with is a very decent wage for a very 'lowly' job (cashier). This way, there is not only income, but good income, and you don't have people sitting around on the couch getting fat and watching reality TV; or doing some BS government make-work, like picking litter off the freeway. You have people working actual jobs making a living wage.

[Beet]

Yes, if you throw in work.

Basically what I would support is, the government subsidizing certain jobs, such as cashier jobs, that normally would be turned over to machines. Instead, the government contributes, say, $18 an hour, the company contributes $9 an hour, and what you are left with is a very decent wage for a very 'lowly' job (cashier). This way, there is not only income, but good income, and you don't have people sitting around on the couch getting fat and watching reality TV; or doing some BS government make-work, like picking litter off the freeway. You have people working actual jobs making a living wage.

I think caregiving for children and adults who cannot live independently (and similar forms of formerly uncompensated labor) are a better, or at least more promising, example, not to mention one that doesn't require the mediation of a third-party employee. There are already some programs that fill this niche, and I can imagine it becoming very common as our population ages.

But any work requirement invites complications and would make the program more difficult to administer while also introducing all sorts of political battles (and likely abuses by large employers) as they seek to influence these requirements to their maximum benefit. The advantage of compensated caregiving is that it doesn't necessarily require much administrative work or rules enforcement, e.g. you have a child or adult living with you for whom you care, you receive a check for it as long as you're not abusive or neglectful.

Doesn't that already happen with single moms and welfare?

[DC Al Fine]

Seems like a grossly inefficient way to create a reasonable social safety net

Eh, the only thing more inefficient than giving poor people money is doing something else.

People say that, but it ignores the other side of the equation. Take a look at this graph



Suppose we want to limit aid to households making $20k per year. This would result in extremely steep implied tax rate for the poor, perhaps in excess of 60%. This is problematic both morally and from an incentives point of view.

In light of this knowledge, many governments opt for less aggressive clawbacks, but this results in ballooning costs and yes, inefficiencies as the government cuts cheques to households that don't need it. From the graph, you can see that a relatively small set of households are low income, but many, many more have moderate incomes. Every time one expands the range of aid, costs and inefficiencies increase dramatically.

To use a real life example, Canada has a modest minimum income for seniors. It costs about 16% of revenue to boost the incomes of a the wealthiest groups in the country. Expanding this to the whole population would be hugely expensive, to the point that it could crowd out things like universal healthcare and education. This is in a country that already has a good size VAT and top tax rates of 46-59%.

There are a lot of tradeoffs required to make even a modest minimum income work. I question whether its worthwhile to implement a universal basic income if universal healthcare could be in jeopardy. It would be better to focus aid on demographics like seniors and children who either cannot earn due to frailty or have no control over their family's income.

[Intell]

Horrific, and will probably ruin the welfare state, and social programs, ways to alleviate suffering. Let's throw some money, and ignore problems of poverty. F*k yeah.

[ingemann]

Horrific, and will probably ruin the welfare state, and social programs, ways to alleviate suffering. Let's throw some money, and ignore problems of poverty. F*k yeah.

The main problem of poverty is lack of money.

So why is this superior to existing social programs. A common problem with social program in the Anglo-Saxon model is that you often end up accidental punish people who try to improve themselves. As example by giving extra money to single mothers, you risk creating incentive for single parent households. By just giving people a sum of money and leave them alone, you create remove the incentives to find loopholes, which are often quite destructive in the long term for the person and community.

[muon2]

To address the implied tax rate for the poor I would think that proponents would give the same basic income to all regardless of earned income. That's what the social dividend would imply. The windfall for the wealthy would be addressed by a conventional progressive income tax. The tax formula would have to collect enough to completely compensate for the basic income grant above the maximum income that would get a benefit.

[Arturo Belano]

By itself, it's just another band-aid on a cancer patient. Just socialize the means of production instead.

[TheDeadFlagBlues]

Seems like a grossly inefficient way to create a reasonable social safety net (particularly if as described by Muon2, with the highly questionable assumption that government should be running companies, and that such companies would ever generate a profit), and without any incentives for life style changes. HP.

This is a bizarre statement. The one thing you cannot say about a universal basic income is that it would be an inefficient means of economic redistribution. It's, as a matter of fact, the most efficient means of redistributing income and, arguably, wealth.

As far as the social safety net goes, you might have a point as far as various kinds of social insurance go (private provision of insurance is fraught with problems of market failure) but, again, a universal basic income is far more efficient than forcing poor people to go through a screening process to receive payments for disabilities or TANF or whatever. The screening process is expensive. Poor people also despise the process.

As far as lifestyle changes go, that's not particularly relevant, is it? Do you actually think that the social problems associated with poverty are the cause of poverty? If so, I suggest you take a few minutes to think about this issue: do you really think it's more plausible that someone was driven to homelessness because they were an alcoholic or that they were driven to alcoholism because of their homelessness?

Look Torie, if you're willing to pay higher taxes so that poor people are forced to suffer before receiving transfer payments, be my guest but at least be honest about the arguments you're making.

[muon2]

As far as lifestyle changes go, that's not particularly relevant, is it? Do you actually think that the social problems associated with poverty are the cause of poverty? If so, I suggest you take a few minutes to think about this issue: do you really think it's more plausible that someone was driven to homelessness because they were an alcoholic or that they were driven to alcoholism because of their homelessness?

I have worked with some homeless. If they were both homeless and alcoholic, then the alcoholism was a contributing factor to their homelessness, not the other way around.

[Antonio the Sixth]

Freedom policy in conjunction with a comprehensive welfare state providing free access to other basic goods and services, and not as a substitute for all that.

Doesn't seem all that expensive to me either. Let's say we make it $1000 a month - that would be $12,000 a year. Based on DC's chart, that would cover about 10% of households (does this reweight income by household size, btw? Because it's a pretty meaningless chart otherwise). That would be around 12.5 million households. But you don't have to give $12,000 to each, just enough for them to get to $12,000. A majority of them seem like they already make more than half that much, so let's say on average we give around $5000 each. That's a total cost of around $60 billion, ie 1.5% of the federal budget. You can easily pay for it by scrapping one or two useless military programs.

[DC Al Fine]

Freedom policy in conjunction with a comprehensive welfare state providing free access to other basic goods and services, and not as a substitute for all that.

Doesn't seem all that expensive to me either. Let's say we make it $1000 a month - that would be $12,000 a year. Based on DC's chart, that would cover about 10% of households (does this reweight income by household size, btw? Because it's a pretty meaningless chart otherwise).

Afraid not. I'm not an economist, so I'm limited to data I can get online for free. However, I did find some more detailed data on Wikipedia. It gives mean household size and income in each bracket on my chart. Average household side in very low incomes is about 1.9, increasing to about 2.5 in middle income brackets.

But you don't have to give $12,000 to each, just enough for them to get to $12,000. A majority of them seem like they already make more than half that much, so let's say on average we give around $5000 each. That's a total cost of around $60 billion, ie 1.5% of the federal budget. You can easily pay for it by scrapping one or two useless military programs.

I took a look at the more detailed data and your costing is surprisingly accurate even though some of the inputs are way off. Your cost is correct to within 10% Funny how things work.

There are two major costs not included in your calculation:

1) Poverty line in the lower 48 is about $12k for a single, $16k for a couple and $24k for a family with two kids. Your proposal would solve poverty for singles with no kids, and no one else. And even that is by the guidelines set out by the US government, which many progressives criticize as too strict. Most minimum income proposals are more generous. $18k for a couple is the one I've seen thrown around lately.

2) Your proposal has no payments to households making over $12k, which implies a 100% tax rate on the first $12k of employment income. That creates an outrageous set of incentives. A person could work part time, or even full time for a year and not be any better off for it. I've seen your income tax proposals, and even in your very left wing scheme, Warren Buffet would have a better tax regime than an unemployed single mother, if benefits weren't paid over $12k in income.

As I noted in a prior post, the outrageous cost of minimum incomes doesn't come from topping up the incomes of the destitute; it comes from making the clawbacks reasonable.  As you reduce the clawback rate, benefits are paid to the more numerous lower middle class, dramatically increasing the cost. To use a Canadian example, the three major benefits are clawed back at 7, 15, and 50 cents on the dollar respectively, and the 50% one is bitterly opposed by the NDP and some Liberals.

I made a basic model based on the data I linked and a pretty standard proposal of $18k and a 30% clawback rate cost well over half of discretionary spending, and that's at an upper middle class implied tax rate.

[True Federalist (진정한 연방 주의자)]

But you don't have to give $12,000 to each, just enough for them to get to $12,000. A majority of them seem like they already make more than half that much, so let's say on average we give around $5000 each.

If someone is making $11,000 and gets $1,000 free, what's the incentive to quit working and just get $12,000 free?  To avoid that problem, you need to structure any such program so that getting paid more to work actually leads to having more money,  If indeed $12,000 is the desired guaranteed basic income, then perhaps half of the difference between what they make and $24,000 would have a chance of working as intended.

[ag]

Alas, while it would solve some of the worst poverty cases, it would also exacerbate long-term poverty. It would, pretty much, guarantee an existence of a stable underclass, without any education and any experience of employmenet in generations - or any chance to get out of this. While it would go a long way to calm down the uneasy consciousness of the middle class, it would, actually, hurt those below it. So, though well-intentioned, it is not a good policy. While appearing to be egalitarian, it is, actually, going to have exactly the opposite effect: entrenching the firm class divisions, reducing mobility and competition.

Now, I am all in favor of the society helping those less fortunate. It is just that this is not going to help, but hurt.

[ag]

One of the World Bank's findings (certainly not a left-leftist institution) in the case of Brazil's Bolsa Família

Let us stop right here. Bolsa Familia involves a "conditional cash transfer". That is not the same thing as the "universal basic income at all". These sorts of programs are, actually, pretty useful in combating poverty. It is just that they are very different from what you think they are.