Hopefully you will share your knowledge with us but in a language many of us can understand
Basic income could very well work. And it would be vastly superior to the stupid idea of minimum wage.
You are basically proposing a government employer of last resort. They used to do this at the poorhouses and workhouses (sometimes they were farms).
If you are going to pay such substandard wages, you have to provide some means of these poor souls to keep body and soul together. This means you probably have to provide food and housing (or subsidies) and a bunch of other stuff (unless substandard wages means a living wage). In which case I wonder why you don’t just give them higher wages instead of pretending to give them low wages and food stamps and HUD vouchers. If the money they are being paid is in excess of the wealth they are producing at the workhouse then why not just give them (in fact I think everyone including Donald Trump gets the basic income) the basic income allowance?
Workhouses led to all sorts of problems in Victorian era England. Lets assume that we can eliminate problems associated with crime and abuse of power. lets say these things are carefully managed so they don’t effectively turn into prison farms for the poor. Is this really the model you think would be best? Is this really an improvement over what we have now?
Medicare pays out the same reimbursement rates regardless of geography and yet the doctors don’t all move to Louisiana.
Food stamps do not have a geographic cost of living adjustment and there are still plenty of poor in NYC and DC.
The late senator Byrd tweaked cost of living geographic areas so that West Virginia got all the same cost of living adjustments as the DC metropolitan area and people still did not pour to West Virginia.
I agree it would be wise to move your whole poor extended family to West Virginia or someplace like that but people just tend to stay where they are.
Of course it’s stupid. The population of the USA is 322 million people. Let’s say the minimum income is $10,000 a year per person (which would be about $5k above the poverty line of $15k for a family of 2). That’s $3.2 trillion a year. Or about 20% of the entire US economy of $16.7 trillion. Or over 80% of the Federal budget of $3.8 trillion.
Now granted, this is a simplified model that presumes everyone gets the same minimum income, regardless of age or family situation. But this should demonstrate the scale of how much such a program would cost.
Yes, a basic income program would cost a lot. I think everyone capable of basic math can figure that out. Is that your only objection?
As for how one could hypothetically pay for that? My off the top of my head plan would be to eliminate the minimum wage, and increase corporate payroll taxes by the same amount so that businesses stay revenue neutral to fund the basic income program. The amount collected would be less than the basic income, however that would be offset by savings created by eliminating welfare and pruning the social safety net.
Now, there’s problems with that method that would need to be dealt with, especially issues involving illegal workers or tax agreement regarding foreign workers. If only one country did this, they’d likely be swarmed with immigrants looking to get in on it. There’s likely more issues that I’m not considering. However, I do feel that as robots get better and automation increases, societies are going to need to deal with the issue of humans without jobs. Basic income would allow many different creative and artistic callings to become viable for people. The urge to collect the most toys or have the status from a good job seems pretty strong, so I don’t expect the majority to stop working.
Of course, this won’t happen. The 1% don’t want 20% of the economy being redistributed equally, they want it to continue to primarily end up in their pockets. They will use their money and power to ensure that it doesn’t happen. So, as I said, economically possible, but not politically likely.
The inflation would hit everybody differently.
Lets say that there is 10% inflation as a result of the payout.
If you used to make nothing and now get $5000 you have an increase of 4500 in purchasing power.
If you used to make 50,000 you purchasing power stays about the same.
If you used to make a million dollars then your purchasing power dropped about 95000.
Of course inflation would probably only get goosed a tiny fraction of a percent but you get the idea.
But if you are making a values based argument then it really is the same thing if you are talking about inherited wealth, isn’t it?
[response to msmith]
That was the problem I had with it. What are the gains to the federal budget to be had from implementing such a system? I doubt we spend more than $50 billion policing welfare fraud (and that figure is surely high and outside). This program wouldn’t make Social Security go away (although it would put a dent in it), nor would it affect Medicare/Medicaid. And it wouldn’t knock a thing off the defense budget (well, very little if any). There may be productivity gains due to such a system, but instituting such a program would be quite a shock to the system and I don’t know how long it would take to see those gains. How much more tax would need to be paid to cover the costs of this?
A “socialist” program that makes more sense to me is UHC which I believe would go a long way to controlling health care costs, make it cheaper for businesses to hire workers and increase worker portability.
My apologies if this has been covered, but I didn’t feel like slogging through the thread.
IIRC Finland plans to experiment with basic income. It’s a very different place from here, but I like experiments.
One thing I forgot to mention in my earlier post. In order to keep inflation down and keep the plan revenue neutral for the businesses we are taxing, wages would have to be decreased by the same amount on average that basic income increased them. This makes my proposal similar to a negative income tax (NIT). Speaking of …
A negative income tax is definitely something that I could support, but I feel that a universal basic income (UBI) is better. A universal system would be easier and cheaper to implement and maintain than modifying the tax code. Also, NIT uses transfers from high-income earners to lower ones, while a UBI appears to have more flexibility on how we fund it. On the flip side, everyone gets UBI, whereas the benefits from a NIT are focused on the poor who need them. AFAICT, both systems are trying to achieve similar goals, just with slightly different methods. I found This paper (PDF) useful, it goes through some of the differences between the two.
As for worrying about de-incentivizing work, keep in mind that I feel basic income should be the absolute minimum required to survive. If workers are looking for more than the bare minimum, they would need to supplement it with a job. I believe someone upthread mentioned the Minicome experiment, (Another PDF) which found “the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women.”
The biggest gains I feel would come from such a system would be cultural. How many people have the inspiration for a great work of art, but are stuck in a life-sucking job that they need to survive? Just imagine all the amazing things that could be created if it wasn’t borderline suicidal to throw your career away and just start creating art without some soft of support system in place. Money alone does not measure the wealth of a society.
He did no such thing, as they do not and did not. You get a check for being a certified and recognized member of the Indian tribe. Not for being a resident of a town. And, they can (and do) kick you out of a Tribe if they so please.
The payouts are funded by a share in casino gambling. Clearly, that system can NOT work on a large scale.
That it would be exorbitantly and impractically expensive? Yeah. I guess that’s my main objection.
So who is going to do all the work?
By the way, plenty of artists manage to work regular jobs and do their art on the weekends or at night.
There is a difference between being very expensive and not economically possible. Redistributing 110% of the GDP would be impossible. Redistributing around 20% of it is merely politically impossible. It could be done hypothetically without breaking economics.
But then what happened to this argument that you made?
Could you explain this further then? That’s different than impractically expensive, and I’m curious where you where going with it. It seems clear to me that most serious advocates of a UBI are talking about wealth redistribution, not wealth creation.
I actually cited the low percentages of the reduction of work effect from the Minicome experiment a few posts ago. Did you read it? Do you have any information that indicates otherwise?
I see this thread has been revived, so thought I’d post a link to this TestTube News video on YouTube talking about Switzerland voting to put something similar in place and about the subject.
Sure, some do. The current system is such that most current artists probably had to start this way; they weren’t offered an alternative. But, just as well, plenty of potentially great artists are stuck in a job purely for survival needs of such a time- and energy- (thus, in short, life-)sucking degree as diminishes or prevents their art from flourishing. Your point doesn’t really cancel Mithrander’s.
*The current system is such that most current artists probably had to start this way; they weren’t offered an alternative. But, just as well, plenty of potentially great artists are stuck in a job purely for survival needs of such a time- and energy- (thus, in short, life-)sucking degree as diminishes or prevents their art from flourishing.
*
I am what I would call a lapsed artist, it has been 6 months since I started to draft a watercolour of a French village I visited last summer. I do not have the excuse of work getting in the way it does not. Creativity does not only manifest its self physically as an object but also as a thought process, many people that I meet who are involved in different unpaid committees are involved in some form of art, paint, photography, ceramics etc. They are the ones who dare to dream (vision) and also dare to try and follow it through, they are the ones who speak out when others who agree stay quiet, many times the pc brigade tell me I cannot say some thing only for some one else to say grudgingly that it is something that has to be considered and the subject starts to evolve (creativity).
What is being discussed here is a form of idealistic communism that can work with small groups, but as groups become towns so the number of drones increase and this means that the essential tasks that everyone hates falls to the few unless practical takes over from idealistic communism (Russian style) that eventually must fail
The only real problem about basic income is implementing it in such a way that it actually works.
Take my proposal, for example (since that’s the only one in this thread that seems to be semi-realistic) – the Census Bureau says that about 23% of the population is under 18. I think we can assume that the payments to children will be offset by the adults who are making too much money to receive the full basic income.
With regard to Social Security, there are two ways we could work this. One is to say that if you’re receiving SS payments of any size, you’re not eligible for basic income payments. That would knock out another 14% of the population. The other way would be to re-classify SS payments, with the first $666.67 per month ($8000/12) being the basic income, and then SS supplementing that to keep the total the same.
You could also start phasing out SS. Maybe something like “Anybody who is under the age of 50 on X date will only receive basic income payments, not SS, when they retire.”
The key fact here is that the government is ALREADY spending the money. The only question is whether we want to change how the money is spent.
Flyer, I may have missed it; did you factor in existing taxes when looking at the cost of the program? I might get $8k or whatever it is, but a good chunk of that is going straight back – assuming we keep the marginal rates the same.
No, I didn’t consider taxes at all. I was primarily thinking of people who either have no job at all, or perhaps just a part-time one. One of the arguments for a basic income is to provide a stipend to artists and so forth who might not otherwise be able to afford to practice enough to get good at their craft.
Somebody who has a part-time job and gets the basic income would likely owe some tax, but the bottom tax bracket is only 10%.