The problem with the premise of a basic income is that is doesn’t really help because there is no change in your relative wealth. This would be a massive amount of wealth taken from “the haves” and given to the “have nots” which means it will immediately be pumped into the consumer economy (ie spent). Prices will quickly adjust upwards to equalize the infusion of cash into the market and therefore everyone will soon be just as relatively poor/broke as they were before.
Suppose you have $0 before basic income, rising to $X after basic income. What change in prices makes post-BI $X equivalent to pre-BI $0?
Mr. ProDentite makes the same error others in the thread make, apparently thinking
*(A) / (B) = (A+C) / (B+C)*What kind of math are they teaching the kids these days? :rolleyes:
Do you really thing adding a smiley face to a joke about the mass murder of poor people makes it funny, or are you just a sociopathic asshole?
Eek, socialism! Oh wait, I’m Canadian, and I don’t think that’s a bad word.
Already cited that the disincentives to work are minor at worst, which you have ignored three times now. However, you are correct on the inflation on labour costs on the low end. I consider that a feature, not a bug. The average wage has lagged behind economic growth for a while now.
What? Does basic income come packaged with laws stating that no one could ever be fired again?
Also, “moral hazard” is a specific economic term, which you are using incorrectly. It refers to parties potentially acting inappropriately due to information asymmetry. How does that apply here?
Untrue. Depending on how progressive or regressive the associated tax system is, it could also be funded in a number of possible methods. My preferred method would require corporations to disproportionately pay, however there are many ways to fund a government program. A basic income program could hypothetically be funded by a very regressive federal sales tax that would target the lower classes more than the upper.
Also incorrect, as Ludovic already pointed out.
Or, it would greatly expand the opportunities for various individuals to create a business and generate wealth. Currently, creating a business is a risky venture which requires a certain amount of financial cushion. A basic income could provide that cushion to many different people when they create and grow a business, thus increasing total wealth generation.
If you actually can articulate an economic theory on why the basic income method is fundamentally flawed, I’d be interested to hear it. However, it appears to me like you’re just appealing to authority and claiming I’m wrong “because Economics.”
Why can’t it be both?
Also reported for hurting my feelings.
What…socialism or Canadian?
Maybe we should use a different term. I don’t equate socialized services like health care or education with massive wealth redistribution for the sake of making people feel warm and fuzzy. Many economists don’t feel that every good or service should be subject to the free market (do you want to have to negotiate with the firemen when your house is on fire). I’m not familiar with too many legitimate economists who believe in basic income.
More of a hand-wave based on wishful thinking than a legitimate cite.
How about like “all of them”? I’m not inclined to provide a basic introduction to Econ 101 supply and demand. Besides, I’ve already given you a number of examples and shown you how the math doesn’t work. What more do you want? A 30 page doctoral thesis?
One of us is failing math. I hope it’s not me, but it’s late, so I could be wrong here:
According to the Census Bureau there are roughly 324 million people living in America this year (250 million of those are adults). According to the OMB, the total federal budget for 2016 (estimated) is just a hair under $4 trillion (source - PDF). That means that if you could wave a magic wand and take the entirety of the federal budget, every single dime we spend on everything, not waste any of it on bureaucracy to administer this, you could give every American a basic income of ~$12,000 / year. And they’d desperately need it because you’ve just laid off ~1.3 million active duty soldiers, 800,000 reserves, and ~2.7 million other federal employees. No more post office, park rangers, TSA (yay!) or FBI, federal courts, highway funds, Section 8 rent checks, food stamps, Medicaid, space program, national defense, EPA (double-plus good!), etc. All that for a measly $1000/month (less than a full-time minimum wage employee would make! It barely puts an individual above the current poverty line). Doesn’t seem like a good bargain to me. Is my math wrong?
ETA: for seniors this is a really raw deal: we’d be giving them less money than SS currently does ($1,332 / month) and they’d have to find a way to pay for their own health care because we wouldn’t have any more money for Medicare.
Maybe you’re just not familiar with many legitimate eocnomists.
Milton Friedman (heard of him?) introduced the closely-related concept of negative income tax in his book Capitalism and Freedom.
Friedrich Hayek supported basic income.
Both of these economists won the prestigious Nobel Memorial Prize in Economic Sciences.
Unintended irony? :rolleyes:
I don’t think that the proposal was to replace the federal budget with only a guaranteed income. The argument from msmith, if I understand it correctly, was that a guaranteed basic income would be unworkable because it would add an amount equal to or much greater than the federal budget on top of the already existing budget. It would not, since we both agree that even if it were $12K per living person it would not even equal the budget. But I am saying that it wouldn’t be $12K per person because many of the 300+ million people are children, who do not need $12K a year because they live in a household. So right there it is already significantly less than the federal budget, even if it would be very expensive at 2+ trillion a year under that simple calculation.
But according to my post, it would completely replace unemployment insurance (which granted it largely a function of the states but let’s assume that we recapture this somehow), completely replace welfare to the poor besides Medicare, and almost replace Social Security, so we won’t lower the SS payments for people receiving more than $12K a year, but it wouldn’t be counted against the cost of basic income, either.
And furthermore we could recapture some of the income by some method that ensures that no one would receive less money than they did before. Assume that this method means that everyone who is already making more than $50K would receive no additional money. This means to me that the cost for basic income would be around or a bit more than $1 trillion on top of the current budget. Which is still expensive but not equal to or much greater than the current budget.
To me this is doable if we really wanted to, if we raised our taxes to the historical level that they were before. However, if we were to raise taxes, it would be wiser in my opinion to use the money for more proven methods of improving the country: infrastructure, deficit reduction, and universal health care.
That’s not what a basic income is.
So, enlighten me please. The CNN article quoted in the op calls it:
Is it the amount? Later in the article, Matt Bruenig is quoted as suggesting more modest payments than my previous example:
Let’s say we went with the more generous $3,000 / year. That’s $250 / month. What social service would we be able to cut that people would now be able to pay for themselves with the extra $250/month we’d be giving ourselves? Certainly not Social Security, Medicaid, or Medicare. Perhaps SNAP. Would we try to trim the budget by the corresponding ~$1 trillion to make the UBI revenue-neutral, or would we try to raise an extra $1 trillion in taxes on top of the $4 trillion the federal government already spends?
It’s not meant to replace all government spending is what I was getting at. I’m pretty right wing on a lot of issues and I’m in favor, at the least, for a national universal basic income if certain other measures were taking as well. I’m not even opposed to considering a global basic income for that matter.
Money is not wealth. Money is a tool to generate wealth. I don’t even care about inequality for the most part. I just think it’s in everyone’s best interest if we had greater demand. With idle productivity it doesn’t hurt to increase the purchasing power of the 99%. Funny thing is the 1% still benefit.
Furthermore, with no minimum wage and a universal basic income, I’d even keep means tested food stamps and some form of socialized catastrophic health insurance, there would be no excuse for unemployment. Social security and Medicare need to stay in place or a refund given for the taxes paid into with interest because those programs were never meant as general taxes.
:rolleyes:
If you think a doctoral thesis is only 30 pages, I seriously wonder if you have any higher-level education at all. You don’t use economic terms like “moral hazard” correctly. Yet I’m supposed to believe that you know anything about economics? You have completely failed to convince me. If you’re not inclined to provide even basic information, which seems to be the case, I think we are done here.
Do not resort to name calling in Great Debates.
Posting it as a question does not shield one from the clear intent.
This is a Warning to refrain from such behavior.
[ /Moderating ]
Yesterday’s WSJ had a write up on this.
QUOTE:
"The great free-market economist Milton Friedman originated the idea of a guaranteed income just after World War II. An experiment using a bastardized version of his “negative income tax” was tried in the 1970s, with disappointing results. But as transfer payments continued to soar while the poverty rate remained stuck at more than 10% of the population, the appeal of a guaranteed income persisted: If you want to end poverty, just give people money. As of 2016, the UBI has become a live policy option. Finland is planning a pilot project for a UBI next year, and Switzerland is voting this weekend on a referendum to install a UBI.
The UBI has brought together odd bedfellows. Its advocates on the left see it as a move toward social justice; its libertarian supporters (like Friedman) see it as the least damaging way for the government to transfer wealth from some citizens to others. Either way, the UBI is an idea whose time has finally come, but it has to be done right."
“Done right”, is the key phrase. I think the idea is worth further exploration. Seeing done first in other nations would be a valuable lesson.
The city I live in is experimenting with this as part of the mayors election promises to decrease poverty. It’s been heavily debated about town, and in council, and it did pass. So it’s coming, in some form or other, as a pilot project, and actually looks very promising I think. (This is the city that created block parents, so they’ve seen ‘pilot projects’ take off before!)
The Swiss just soundly defeated their Basic Income referendum, which does not bode well for the idea.
The thread bump caused me to click. I see that my post was never acknowledged.
Maybe you’re just not familiar with many legitimate economists.
Milton Friedman (heard of him?) introduced the closely-related concept of negative income tax in his book Capitalism and Freedom.
Friedrich Hayek supported basic income.
Both of these economists won the prestigious Nobel Memorial Prize in Economic Sciences.
[/QUOTE]
Hayek and Friedman may be the two most famous right-wing economics Nobelists. The two most famous left-wing Nobelists, Krugman and Stiglitz, also support basic income.
A better question might have been to seek “legitimate economists” who do NOT believe in basic income. 
@ msmith537 - This board is supposed to be about fighting ignorance. Did you learn anything here?
A huge proportion of the amount will be a replacement of the existing deductions/exemptions/reduced rates by UBI.
For example suppose now you have a top 25% rate on a $50,000 income. Currently with the standard deductions/exemptions/reduced rates you would pay $6,250 in federal taxes.
Instead suppose you collect 25% tax on $50,000 = $12,500. If you got a $6,250 UBI this would leave you in the exact same place–paying $6,250 in taxes.
Perhaps in 30-40 years automation may convince more. Maybe not.
http://www.wsj.com/articles/a-guaranteed-income-for-every-american-1464969586
Murray’s* proposal is that everyone over age 21 gets $13k/year (but has to spend $3k on insurance)
The grant starts to decrease after a certain income threshold. Why he doesn’t just accomplish the same with taxes, I don’t know. Apparently a revised version of his 2006 book is coming out soon.
He doesn’t go into much detail in the WSJ piece, but as summarized, I see this not working out so well for a lot of people.
*Of Bell Curve…fame