Basic Income is often proposed in conjunction with cutting basic social services & welfare payments, thus achieving a net gain for the government. This seems to make it attractive to both the neoliberals and the neosocialismés, but I believe this is a terrible mistake that will have the exact opposite effect to what its supporters intend - there will be more poverty and debt slavery, not less. (Methodology debates aside, I generally think both sides want people to propser & be happy).
My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Instead I believe we should leave our dealings with money to the marketplace, but should definitely act as a society to provide a good life for all citizens by seeing that their basic needs are met. Make free public housing that all citizens have a right to ask for. Provide basic but nutritious food to the populace, for free. Encourage free markets and capitalism, but see that the basic needs of every citizen are met - and perhaps a little power in the marketplace i.e. money is also a basic need, but its still only one of many. "If they didn't already exist, people would think public libraries were the most radically extreme socialism".
For these reasons, the growing popularity of BI is worrysome to me. It's just neoliberalism made pallitable by a once-in-every-few-generations wealth transfer.
"it could occur slower and over a few generations but sooner or later poverty is back." But, if the UBI is set to a percentage of GDP, then as overall wealth increases, the wealth of those depending on UBI increase. In the past few generations, ex. since the 1950's, real GDP has grown 6x [1] while the population has only doubled [2], meaning the real wealth of our society has grown three-fold in "a few generations".
> But, if the UBI is set to a percentage of GDP, then as overall wealth increases
That's an extraordinary assumption. The majority of nations in fact do not see routine, much less significant, overall wealth increases. Major economies as varied as Germany, Mexico, Russia, Britain, Japan, Brazil - have seen near zero economic growth for the last decade. The US appears in fact to be starting a protracted stagnation of growth, due to its extreme debt (in most every regard from public to consumer to corporate), resulting in problems similar to those experienced by Japan due to its egregious debt problems (low productivity gains, weak or negative income growth, weak or negative real wealth gains, low GDP growth, etc).
UBI can't be implemented in a nation in which population growth is falling rapidly (fewer workers to carry the tax burden), while debt is already sky high, incomes are stagnant, and existing entitlement system IOU's are already set to bankrupt (either directly via default or indirectly by currency debasement) the government (with already dire perpetual half trillion plus dollar deficits with the public debt soaring toward $30 trillion next and annual deficits set to climb toward a trillion dollars).
I'm not sure that it gives good incentives to have it directly linked to GDP. I think it would make more sense to have a circuit-breaker type provision where if GDP increases by more than x% the amount increases by y%, but I doubt we would want to decrease it immediately when GDP decreases, since that has the potential to cause a runaway feedback loop.
That's really smart. I hadn't even considered that and was naively operating on a default assumption of increasing GDP. Especially during a recession, adjusting the basic-income downwards with GDP could create a devastating runaway feedback loop. I think as you wouldn't want the economy to grow faster than basic income, though, in the circuit-breaker-style implementation as GDP increases by more than x%, the amount should also increase x%, by default. When the GDP is assessed, say annually, it should only increase or maintain the current basic income rate. In the event of an unprecedented long-term decrease in productivity, the congress should be required to take action to lower the payouts.
You're right - it serves both conservative and liberal ideals, which is a good thing.
> but I believe this is a terrible mistake that will have the exact opposite effect to what its supporters intend - there will be more poverty and debt slavery, not less
> My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Two arguments against this. The first is that you are comparing a steady income with an insurance. You can always spend your BI on insurance. Wether insurance would be more expensive if you had BI or not, has not been proven in this model, but it could go either way.
The second is that BI in that tought experiment, even if you eliminated insurance-type nets, would still yield lower poverty. Its just not the exact same people. That is one of the hardest problems on any social welfare program: if you need to improve everyones position absolutely and relatively, you basically cant do anything. You have to let some lose for others to gain.
> Make free public housing that all citizens have a right to ask for.
Median rent in the US is $934 thus this one benefit costs the US goverment as much as this proposed BI would. Unless we are talking about housing where people aren't which is likely a non-starter for a slue of reasons.
UBI doesn't need to cover the median cost of living in the US. In fact with just income tax that is an impossible line to hit as it would certainly trigger inflation.
But that doesn't mean that X dollars won't matter. In fact that is the entire purpose of this study "If we give people $1000/month, what happens?". Sure it isn't representative of what would actually happen with BI but if the study is done well and its findings are sound through review, then it would be a great way of answering "would that amount of money matter".
UBI isn't expensive. Its wealth redistribution, not consumption. Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. Social security is better than military spending but usually worse than UBI - recipients of social security are some of the richest people right now as an age class, so transferring wealth to them often doesn't see it stimulating economic growth - it just gets reinvested. Additionally, social security taxes are not progressive - they cap out, and anyone making any money over 10k is paying into them. Its a regressive tax scheme that takes money from disproportionately the working poor and moves it into a richer age group.
It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending.
On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment.
Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial.
UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.
>>Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year.
I am no fan of the military and I agree with your premise, but I would strongly, strongly disagree with the "little R&D" portion of this comment. A great deal of technology we take for granted today was first made available due to the military taking on the huge reverse asymptotic cost curves of early adoption and invention of new tech.
The military is an inefficient and potentially immoral R&D department, but it is not one that generates very little. A quick historical look at what has come out of the machinations of war and preparing for it will illustrate the point, and fast.
In terms of R&D for dollar spent, the military is awful compared to fairly parallel state institutions like public universities and NASA. If you want R&D, you shouldn't do it indirectly through researching ways to blow people up and murder - you should just do R&D spending.
A lot of the problems when discussing the military budget are intentions. Nobody is proposing to grow or keep the current scale of the military on the idea its a valuable source of research. It is in the same vein as how you would not fund a basic income for research purposes - surely a lot of valuable R&D would actually come from a UBI by letting more people experiment as a hobby, but you wouldn't use it as an argument for making a UBI because the research per dollar spent ratio would be awful compared to dedicated research institutions.
Funding CERN et al is on the order of magnitudes more bang for your buck if you are spending money to advance science than spending it on a military.
Which relates back to my original point. All government spending needs to be interpreted through one of two lenses - either the government is absorbing an absolutely unavoidable expense and using its scale to lessen the burden (infrastructure maintenance, healthcare, retirement) or it is investing money with the intent for it to improve the country. There is absolutely a lot of overlap, but we are back at intents - when healthcare makes your citizenry healthier more often so they can be more productive that is a nice perk but does not come close to justifying public healthcare spending. Infrastructure can fall into both camps - building last-mile roads is absolutely not in all likelihood going to grow the economy - people would live more densely if not for state subsidies on public housing developments hooking into the public road network. But when they build highways to increase traffic throughput that is almost always with intent to grow the economy.
A UBI falls in both camps, but conservatives should focus on the later benefits. The economic growth potential. On the topic of the military budget, anyone arguing for the current scale of the US military is arguing for a "necessary expense" perspective, not an investment one. Because its investment value is atrocious. And in general people are very skeptical of anything suggested to qualify for the first camp - and we should always be skeptical of those expenses, because they are the legitimate expenses where government spending actually contracts the economy.
If you strip out all the regulations in healthcare all it takes is one preexisting condition to make healthcare runaway expensive for a majority of people.
Most UBI proposals include universal healthcare because healthcare is a problem best solved when everyone is in the "insurance pool" automatically. As long as the hippocratic oath exists and doctors have to provide life saving treatment it will always be in our macroeconomic self interest to incentivize people to seek healthcare before its life threatening.
My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Instead I believe we should leave our dealings with money to the marketplace, but should definitely act as a society to provide a good life for all citizens by seeing that their basic needs are met. Make free public housing that all citizens have a right to ask for. Provide basic but nutritious food to the populace, for free. Encourage free markets and capitalism, but see that the basic needs of every citizen are met - and perhaps a little power in the marketplace i.e. money is also a basic need, but its still only one of many. "If they didn't already exist, people would think public libraries were the most radically extreme socialism".
For these reasons, the growing popularity of BI is worrysome to me. It's just neoliberalism made pallitable by a once-in-every-few-generations wealth transfer.