ForumTouchy Subjects ► Universal basic income
What do you think of universal basic income?

On the one hand, rule #1 of economics is that people respond to incentives. UBI effectively takes more money (taxes) from richer people, filters it through the leaky seive of government, and distributes it across people who weren't making enough money before. It would dis-incentivize poor people to work harder, and also dis-incentivize people from becoming very rich.

On the other hand, isn't it a government's job to provide for its citizens? Having Jeff Bezos as a citizen in a country with starving people doesn't seem very fair.
I was very skeptical about Yang's "Freedom Dividend". After some consideration I have decided I think it's worth a shot if we use his value added tax on internet and tech businesses that game the system to avoid taxes.

Two things to note: Yang's plan will cost as much as the entire federal budget and the market will adjust prices to maintain profit margins. This is because UBI will not improve the GDP or the economy.

The benefit of having a UBI is wealth distribution. Even with the market adjusting prices based on the tax, people in general will have more spending power because the wealth can't be as consolidated. It's main purpose would be to improve quality of life and help people afford basic needs.
xenarian said:
On the other hand, isn't it a government's job to provide for its citizens?
I'm going to say no, it's a government's job to provide for the basic safety and freedom of its citizens. People ought to be self-sufficient to the extent possible. I think this is important to promote a sense of self-worth, to encourage industriousness, and to limit the necessary evil of taxation on justly earned wealth. The government should provide a safety net for those who fall into misfortune or otherwise can't provide for themselves, but that shouldn't be the default state of every citizen.

There will come a day when automation makes virtually all human labor obsolete. This will probably be a gradual process, with progressively more individual professions obsolescing (textile workers, switchboard operators, truck drivers, programmers, ...). But I don't see any good reason why we would need UBI at any point along the way. Instead, I think it is more just, fair, and efficient to simply expand welfare programs and raise taxes (and make them even more progressive) as needed.

To proponents of UBI, why is it better to redistribute tax money to people who don't need it rather than expanding the existing welfare system? Why hand out $1000/month to Jeff Bezos? Or to a $250k/year physician? Or to an $80k/year software engineer?
Means-testing adds administrative overhead, red tape, and potential for fraud.

As one of those software engineers, I'd rather pay in $2000 in progressive taxes and get $1000 back. I don't mind it because I know if I lose my job, I'll still have the $1k to support me.

Having applied for government assistance before, when I was at a much harder time in my life, I can assure you that the process is neither easy nor fast.

You've also got to build in new complicated systems to decide who "deserves" it more - what happens as your income goes from $20k to $40k? Hard cutoff, 1:1 reduction, or something there? How about when you get married, or have another kid?

We have enough complicated rules, let's keep stuff simple when we can.
Presumably, a system with UBI would not produce a Jeff Bezos, it eliminates potential fraud and drives consumer spending which drives the modern economy; innovation doesn't exist without a market, and it's provably true that social programs benefiting low income households boost local and national economies.

The argument that people require economic incentives applies far more to a benefit than to UBI. A benefit removes the incentive for low income labour -- particularly hard capped benefits -- a UBI does away with that: every dollar you earn is a bonus to an already livable sum. Benefits aren't fabulous, we either set them high enough that no one is in dire economic straights or we set them to subsistence levels to minimise the number of people who are sort of fine with that, while screwing over the needy who really do just need a month or two to find work.

Lastly a UBI allows economic restructuring -- we've kinda just accepted that jobs are going away and our economy looks nothing like the production-centred 19th-20th century model, but haven't updated the way we view the workforce. Most companies that trial shorter work weeks are impressed by increased productivity, and leisure time again drives consumer spending. In effect, a business could hire a larger more "part time" work force, and workers would individually have more time. That, to me, sounds far more beneficial, more gradual and more satisfying than creating a smaller pool of full time workers while an increasing number of people are put entirely out of work, I genuinely think people do poorly without any kind of occupation or purpose, and worry what humans will look like in a system with mass and socially accepted unemployment.

To be fair this isn't a dissertation, these are kinda just preliminary thoughts I'm happy to have picked apart.
Economies improve with increased spending, and UBI in theory distributes cash from people who don't spend it (the wealthy) to people who will spend it (low and middle-class people). That creates circulation and stimulates the economy. Having this as an option is increasingly important for fighting recessions as our interest rates are so low they can't really be lowered to stimulate spending.

Additionally, a UBI does not always lead to inflation and, in fact, Yang's plan does not appear to be substantial enough to lead to inflation.

It's entirely possible that a $1000/mo UBI wouldn't have significant impacts on inflation and would radically boost the economies of poor and rural areas.

I do agree that a UBI could boost the economy due to increased spending but I avoid making that claim since I don't actually have much evidence for UBI in action. Though I do agree and it is quite obvious that reducing income inequality will result in increased incentive to spend. I was also unaware that UBI might not significantly effect inflation.

All that said, I'm unconvinced that UBI is the best approach for solving problems in the US right now. There's not a lack of jobs, there's a lack of labor. We'd be better off making vocational re-training universal and free and incentivizing companies to develop in areas of the country traditionally reliant on manufacturing.

I've been thinking about this. There's a lot of free programs out there and skills workshops that are free. I think the problem is their accessibility to the homeless. A lot of times people lack a basic home, vehicle and address to get started in a job. I think creating affordable free homes and putting more money into food stamps might be better than simply handing out money.

If we're going to spend trillions of dollars, we should be working on climate change. Once we know the planet will last a couple hundred years, we'll have more time to find the right economic solutions as automation continues.

The US isn't the greatest factor in climate change. Even if we reduce emissions the problem is that we're not alone in this. China is a huge contributor to climate change and so are a number of smaller countries with terrible pollution. I agree we should put money into combating climate change with the stipulation that we are doing it to find more economically advantageous sustainable technologies that will be adopted worldwide without sacrificing current sources of energy until viable alternatives are in place. When we pulled out of arctic drilling during the Obama era and stopped having the military patrol that region, Russia set up shop and they're not as friendly to the environment as we were. As it stands with the environment, everybody will be negatively effected with our current course of action, but we can't put ourselves at an economic disadvantage and take the moral high ground while Russia and China take advantage of our absence and continue to make things worse.
The US is the worst per capita. Also, just because China will still pollute the environment doesn't mean reducing America's emissions isn't a huge step in a positive direction.
Emissions by Country

When compared to China, yes. Even still Canada is relatively close. Per-capita isn't as useful a distinction when you consider the US's role in the global economy, worldwide defense and the stability of our population. I'm not saying the US shouldn't work to reduce emissions but we can't be unrealistic about it. We should be making political moves to incentivize the end of deforestation in South America and stimulating the worldwide economy by funding research into clean energy and energy-efficient engines; also, investing in the long term by replacing old power plants that waste energy with energy-efficient infrastructure upgrades. One major problem is all the meat in the US. You'll notice countries near the top consume lots of beef or dairy.

It's also difficult to think of ways we can reduce emissions by cutting back without putting ourselves at a disadvantage or having unrealistic expectations of people. We have to make it easy to do the right thing with policy that favors clean energy and solutions to waste.
Call me elitist, but I think some amount of paternalism in the welfare system is appropriate. I get the autonomy and dignity argument, but I am not convinced it's more effective in practice. Of course the poor are not generally stupid, but I think it's fair to say they are less likely to manage their finances effectively, which is partly why I think targeted programs like WIC and Medicaid are better than simple cash handouts. I also appreciate the desire to reduce administrative overheads, but the overheads are already so small in comparison to the payouts that I don't think it really matters.

Economically, I'd like to see data supporting the idea that UBI compares favorably against more targeted, less regressive welfare programs. Also, it's beside the point, but I think the model that wealth redistribution uniformly improves the economy (since lower-income people spend more) is too simplistic since it ignores investment; rich people don't just stuff their money in their mattresses. Regardless, the UBI debate isn't a question of wealth redistribution per se but where and how it's redistributed.

Anyway, remember that UBI or the status quo are not the only options. We can improve and expand on existing programs, e.g. by extending benefits to more people, avoiding hard cutoffs on benefits (that may disincentivize work), and making it easier to claim benefits for those who actually need them.

If anyone has a spare hour and a half, I'd highly recommend the Intelligence Squared debate on this topic. I listened a while back, and it helped shape my stance on the issue.
I lean towards improving, updating and refining current systems and making them more accessible and widely available. SNAP, WIC are great ideas but in practice they're a bit lacking. WIC is helping dairy by loading up pregnant women with copious amounts of milk.

Also, financial education and learning the tax system would be nice. Parents and the school system do a terrible job of preparing people for life. I also would push for cheap housing and transportation just because it's so hard to get a job without an address and a car. Car debt in the US is very high. Many homeless work programs can't help people because without a home they can't get a job.
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