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funding.basicincome2013.eu"Unconditional basic income is a new form of total social security for all citizens. It’s an unconditional monthly sum, paid out to by the government to every citizen - rich or poor, old or young, employed or unemployed."
Well, they should have written
"Unconditional basic income is a new form of total social security for all citizens. It’s an unconditional monthly sum, taken from taxpayers and paid out to every citizen - rich or poor, old or young, employed or unemployed. "
Combined with some progressive taxation this works out to be massively more efficient and helpful than most other forms of welfare. Replace foodstamps/subsidized housing/unemployment-insurance/myriad-of-other-safety-net-programs with a basic guaranteed income and everyone is better off. See http://en.wikipedia.org/wiki/Guaranteed_minimum_income .
For those interested, a good way to implement this was proposed by Milton Friedman
http://en.wikipedia.org/wiki/Negative_income_tax
which indeed works out to be better than government sponsored programs.
Progressive taxation has nothing to do with it though, it's not required at all.
Milton Friedman proposed negative income tax _in addition to_ guaranteed income. Worth noting that the US has partially implemented negative income tax (we call it EITC) - it's working really well and should probably be expanded (probably worth taking money from other welfare programs if it comes to that).
EITC is not a negative income tax. In a negative income tax, below a certain level, each marginal dollar of reduced income produces an additional negative amount of income tax (or, equivalently, positive amount of refundable credit.)
EITC is a work incentive program that provides additional income tax credit with increasing labor income up to a certain amount -- the feature for which it is named as a tax credit for earned income -- and then tails off above a certain point. In the range from the peak to the tail off, it might be mistaken for a negative income tax, but that's true of any tax credit (or even, really, a tax deduction) that has a soft cap. But that's not really the basic design or function is, and, while the EITC may work fairly well, there's no good argument I can see that the negative-income-like portion of the top end of the EITC benefit curve is a contributor to its beneficial functioning, except perhaps if you consider it only against having a sharp cut-off where the benefit drops from the maximum to $0.
Correct link is http://en.wikipedia.org/wiki/Basic_income. GMI is different.
The problem is that not everybody's costs are the same. A disabled person may have much higher living costs due to needing additional care and special equipment to help them, they also have less chance of gaining employment in order to increase that income.
Also consider costs of living/housing etc. For example an unemployed programmer might be better off staying somewhere like SF where costs are higher because they are more likely to get a job there.
The risk would be that you ended up with low cost of living slum areas where the unemployed would congregate , separate from the productive economy.
>The problem is that not everybody's costs are the same. A disabled person may have much higher living costs due to needing additional care and special equipment to help them, they also have less chance of gaining employment in order to increase that income.
This would seem to be the case regardless of the type of government assistance provided. Suppose we provide enough that a disabled person can live a dignified, if spartan, life. Should we deny that same level of support to someone else, who may be more able to contribute to society, just because that person is not disabled?
> Also consider costs of living/housing etc. For example an unemployed programmer might be better off staying somewhere like SF where costs are higher because they are more likely to get a job there.
That's the reason why the cost of living/housing is higher there. Increasing government subsidies in areas with higher costs cause the costs to increase even more, because recipients of government assistance then have that money with which to pay, increasing demand without increasing supply and therefore raising prices. Meanwhile only the poorest of the poor remain in the lower subsidized areas because they can't afford to live in more desirable areas even with some government assistance, causing those areas to degrade even more. This is the same logic that leads to the mortgage interest tax credit which benefits mortgage lenders much more than homeowners (and screws over renters even more) -- you're subsidizing the sellers of housing and loans more than the buyers because you're increasing the demand rather than the supply. If you want to help the poor live in San Francisco, subsidize the construction of affordable new high density housing and mass transit there, so that the cost goes down rather than up.
> The risk would be that you ended up with low cost of living slum areas where the unemployed would congregate, separate from the productive economy.
That's what happens already. If anything a basic income can disrupt such behavior, because it allows people living in poorer areas to take better risks, and provides them an increased incentive to seek employment because taking a job doesn't result in the discontinuation of government benefits.
The point is more than a disabled person will require a higher subsidy to attain the same standard of living. The differences can be enormous.
A non-disabled person can walk or cycle around the city to pick-up groceries whereas a disabled person might need a specially modified vehicle or may require the services of another person. Subsidizing everyone to the same amount as required by the most disabled of people would be unsustainable.
I guess by the second point I mean the short term unemployed more than the "poor" per se. Consider a person who has just graduated from a university in SF and wants to remain there while they look for a job in SV. If they can't afford this , they might have to move to a poor area with less opportunity.
Optimistically it might produce more opportunities elsewhere if there is an influx of educated people, but pessimistically it might mean that those who are independently wealthy are the only ones who can take the risk of living in SF.
The "most disabled person" who is not independently wealthy is not going to achieve the same standard of living as the average person. If you need a special vehicle and you can't afford it, you can live across the street from a grocery store and get a job working there.
You're basically talking about the "heart transplant problem." Suppose you have zero dollars and no job and you need a heart transplant which will cost $200,000, which will cause you to live for another two years, or else you will die today. The government can't afford to pay for that -- people can say "death panels" all day long but the fact is that with the current state of medicine and technology we cannot save everyone, and it is not productive to bankrupt the government paying for measures that are more expensive than they are effective. Moreover, the fairest way to distribute government services is to give the same amount to everyone. If you need more than that amount, seek charity. There is a point past which government cannot fix every problem, and we can't calibrate society to the level of the "most disabled person."
> I guess by the second point I mean the short term unemployed more than the "poor" per se. Consider a person who has just graduated from a university in SF and wants to remain there while they look for a job in SV. If they can't afford this , they might have to move to a poor area with less opportunity.
So how is that different with a basic income than it is today?
If you are severely disabled it's really not a case of "just live opposite the grocery store and work there". Many disabilities will mean that a person simply can't perform economically productive work at all. If you have a degree of means testing you can afford to provide for these people because they are a relatively small % of the population.
In the UK for example we have disabled people who receive more in total government assistance than many able people would when working a full time job. For example they might need full time carers. Relying on charity will favor those who can best play that game, which will by definition make things harder for people with certain disabilities, particularly mental disabilities of less "popular" ones.
> So how is that different with a basic income than it is today?
If you give people different amounts of housing based on the relative costs of housing in different areas then they will not have to move to a different area and can stay where they are more likely to find work.
>If you have a degree of means testing you can afford to provide for these people because they are a relatively small % of the population.
The problem is that they're not, because you're just picking some subset of the population and saying they're more needy than everyone else without actually providing any proof of that. Why aren't the victims of automobile collisions just as needy of that money so that they can buy more expensive safer vehicles? Why don't indigent cancer patients "need" the same level of care that Steve Jobs got?
You can pick some arbitrary subset of the population and say that we can afford to provide for them because they're a small percentage, but you can't pick that population in any just or rational way because everybody needs something -- everybody dies and would benefit if the government had given them more resources to fight the thing that killed them.
> Relying on charity will favor those who can best play that game, which will by definition make things harder for people with certain disabilities, particularly mental disabilities of less "popular" ones.
Charity is exactly as much a "game" as applying for government benefits is. If you feel for the plight of the mentally ill, by all means donate money to the charities that help those people, and join together with everyone who thinks the government should be helping them out of proportion to the rest of the population to do likewise.
I mean people who can't do the basics such as feed or clothe themselves without assistance, not people who want a better car.
You're making an emotional argument. Let me try. Why are you condemning the single mother whose job has no access to mass transit and who can't afford to live within walking distance, who therefore has to drive a death trap and endanger her life and the lives of her children?
The problem is that we have limited resources. We can't save everyone. And making emotional arguments gets in the way of doing the most good. Why is it better to spend money on nurses to change the bed pans of the mentally ill than to spend it giving opportunities to those who want to go to medical school, who may one day ultimately cure them?
Good points, especially the varying cost-of-living associated with medical conditions. The obvious gets-us-most-of-the-way-there solution is to have those costs covered by a generous healthcare system as a separate matter from guaranteed income.
Living in SF is a good, like a car or a degree. All of those things help you get a job, but it should be up to you which of those you choose to invest in. Throwing in cost-of-living adjustments is equivalent to a guaranteed income except that the government requires you to spend $X on housing - it's strictly worse for everyone.
"The risk would be that you ended up with low cost of living slum areas where the unemployed would congregate , separate from the productive economy."
But in this case, they would be able to offer each other money for providing each other services. Congregations of people would inherently be able to realize some demand, which is not presently the case (or that demand is filtered through bureaucrats).
Maybe, but the same could probably be said about the favelas in Brazil. It probably makes some sense to subsidize people to live in the area where there is currently the most opportunity for them.
"Maybe, but the same could probably be said about the favelas in Brazil."
I'm not really sure what you are saying here. My understanding of the favelas is that there is a great deal of economic activity going on there, and a lot of people working actively to better their situations. Limited resources coupled with sparse, unequally applied regulation and rule of law leads to some bad situations, but those in the favelas are living in the favelas primarily to have access to the economic activity of the city. Resources go to the favelas only in proportion to the earning power of the residents, which dynamic basic income specifically changes, and it is this change specifically that I am saying is likely to produce better results.
It's totally possible you were saying something I'm missing; if so, please clarify.
"It probably makes some sense to subsidize people to live in the area where there is currently the most opportunity for them."
Physical location matters, but it matters less than it ever has before. Ideally, we want more places with opportunity, not ever higher rents in SF and Manhattan.
Universal health care is prevalent in Europe and might alleviate the effect of 1).
The situation you describe in 2) is the status quo, no? UBI would mean more money for those who've been looking for a job for a long time.
I might agree. However, most people will want basic income as an extra, not as a replacement. I would bet a significant amount on that (i.e. basic income being popular only until poor people figure out what are they going to lose).
The masses don't like taking care of themselves. Not even if they get 'free' money for that.
Any proposed government program that causes the net wealth of any distinct group of people to increase or decrease is going to be supported or opposed by various people for self-interested reasons. But the point is not to to wage war over who steals money from someone else and gives it to themselves by way of government bureaucracy, the point is to do something that results in a net benefit to society, for example by reducing the disincentive to work created by the discontinuation of government benefits when one finds gainful employment. The net result of that is to reduce unemployment and underemployment, which increases the tax base and allows a given level of government services to be provided at a lower tax rate (or an increased level of government services to be provided at the same tax rate, depending on your policy preferences).
> Combined with some progressive taxation this works out to be massively more efficient and helpful than most other forms of welfare.
That seems to be a conclusion without any premises, woefully short on data and implicit but imprecise definitions of 'efficient', 'helpful' and 'welfare'.
Guaranteed minimum income is based on need, basic income is based on citizenship.
>Combined with some progressive taxation this works out to be massively more efficient and helpful than most other forms of welfare.
Is this empirically proven somewhere? Or is that what its proponents are saying? Forgive me if I'm a little cynical when someone tells me an idea they support is a much better form of welfare than what we currently have but doesn't back it up with proof.
"Efficiency" is ambiguous. In terms of (benefit dollars delivered)/(benefit dollars delivered + administrative costs) its almost true-by-definition, since the absence of means testing removes most of the source of administrative requirements in traditional welfare programs.
In terms of effectiveness at achieving the goals of welfare programs, it is far less clear, though there are pretty clear arguments that certain features of basic income -- particularly the lack of disincentives to outside income -- are beneficial in that regard. OTOH, there are also pretty clear arguments that the lack of need-based focus -- which is intimately tied to the lack of disincentives -- are potentially negative, especially when replacing welfare programs whose existing qualifications are based around special needs (e.g., programs qualified by particular disabilities) that increase costs rather than simple lack of resources (e.g., income/asset-qualified poverty support programs.)
How would you go about getting supporting evidence for something that hasn't been tried yet? At the very least we would save a ton of money on bureaucracy and corruption.
> How would you go about getting supporting evidence for something that hasn't been tried yet?
You would get supporting evidence for each of a set of propositions, from which the efficiency (however that is operationalized in context) of the particular plan being proposed follows.
The whole point of the scientific method is that it allows us to have justifiable (even if not certain) evidence-based predictions of things that haven't been tried yet.
Why? Do you think the hundreds of thousands of people who work in the social services industry would sit idly by while their jobs are eliminated? Of course not. And that is the real reason it will never be implemented. For this to be palatable to the right, it's got to credibly eliminate a large existing bureaucracy -- something which might be palatable to the left, but for the specific interest of that bureaucracy.
The point isn't about money being "taken from taxpayers". They are already doing that regardless!
The point is would you rather have that money fed through an expensive, heavily bureaucratic and often corrupt means-tested welfare system, or would you rather just have it all distributed to everyone equally with nearly zero overhead and no means left for abuse or misuse.
I think the answer is obvious.
There's a logic problem with Basic Income.
They want people to think either: 1- it will help me earn more (because I make less than the BI) 2- it won't change anything for me (because I already make more than the BI)
But obviously, these two assertions can't be true at the same time.
Instead they should think either : 1- it won't change a thing 2- it won't change a thing (so why do it?)
OR
1- it will help me earn more 2- I will earn less so others can earn more
BI advocates say it is an important change. So they advocate for a tax raise, but they "forget" to say it.
> There's a logic problem with Basic Income.
No, there's not. At least, if there is, its not the one you claim.
> They want people to think either: 1- it will help me earn more (because I make less than the BI) 2- it won't change anything for me (because I already make more than the BI)
Who is "they"?
> But obviously, these two assertions can't be true at the same time.
They can both be true if the benefits plus (reduced) admin costs from BI come strictly from the benefits plus (higher) admin costs of the welfare programs it is replacing. (There are people who make less, in the short term, in that scheme, but its only some subset of the people who are making money from the admin costs of the replaced programs.)
They can't if you set BI at a level that requires more money than that, or if you do it without replacing any existing programs, but neither of those is inherent in the concept of BI (and the latter, at least, I've never seen proposed.)
So you'll agree that there IS a problem IF the left wing is pushing towards BI: reducing administration (or state) footprint is more libertarian than anything. It's only credible if libertarians ask for BI... How funny!
> So you'll agree that there IS a problem IF the left wing is pushing towards BI
I didn't say anything that resembles that, no.
> reducing administration (or state) footprint is more libertarian than anything.
"Left wing" and "libertarian" are not opposed, and improving efficiency in achieiving left wing policy goals is not at all a view point incompatible with the left wing.
Heck, improving efficiency of government isn't incompatible with left or right wing, or libertarian or even authoritarian philosophies. Even authoritarian conservatives would probably prefer that, to the extent that liberal goals are going to be addressed by government at all, they ought to be addressed by the least wasteful means possible (if only so as to maximize resources available for authoritarian approaches to conservative goals.)
Basic income doesn't inherently require taxes to increase, especially if you measure it as taxes paid less government benefits received. You're thinking of things in class warfare terms -- someone else gets more money from the government therefore I get less or pay more. Any program that works on that principle is just redistribution of wealth, or naked corruption.
The benefit of a basic income is that it changes incentives. In the existing system you lose government benefits if you take a job, so if the only job you can get pays low wages you have a significantly reduced incentive to seek employment. Higher unemployment means lower tax revenues, lower economic growth, etc. Fighting that is why a basic income is superior to means tested government assistance.
Say I'm jobless, and I make 1000/m. If I find a job that pays 1100 : - with BI I'll make 1100. That's the value of work. - without BI I'll make 100 + 1000. The value of work is 100.
With BI, people will think "I don't want to work for 100/m" (you know, it's the gov that pays the other 1000/m). You'll hear people say "I'm paid 1000 just to breathe, why work for 100?".
It you want to limit this problem as much as possible, you'll need a basic income of exactly 0.
Problem is, rich countries already have welfare systems and hardly anyone would support completely eliminating them. So people are already paid to breathe. The question is how to do so while minimizing perverse incentives.
Exactly. The problem right now is that if you have no job, you get government assistance. If you get a job, you lose the government assistance, so a job that pays $1200/month only allows you to keep $200 in your pocket because you've lost $1000 in government benefits by taking the job and no longer "needing" the assistance. We've created a de facto 80+% marginal tax rate on the working class vs. being unemployed, which is economically Very Bad.
I don't agree with you. If you find a job at 1200$/m you keep 1200$/m in your pocket, not 200... The real problem is if you get paid 80% of that for breathing, because of government assistance!
When you want to help some industry, you'll give subventions to it. It should be no surprise that subventions to unemployment lead to more unemployment!
France (where I live) has a track record : we almost have basic income (it's called RSA http://en.wikipedia.org/wiki/Revenu_de_solidarit%C3%A9_activ...), unemployment rate is >10%, taxes are record high and growth is NaN.
Recently, I heard a lady (29 yo) tell me that her 1700€/m salary was not enough to compensate for the loss of social assistance. She decided to resign... but 1700€/m is the MEDIAN SALARY in France! 50% earn less than that!
I think you're confused about the difference between a basic income and a guaranteed minimum income. What you are describing is the latter, but what we are advocating is the former.
I just tried to explain that even guaranteed minimum income can discourage people from working. Basic income will have even more severe counter productive effects. I don't see AT ALL why it would not.
No, it's the opposite. That's the main difference between the two, actually. Listen to Milton Friedman: http://www.youtube.com/watch?v=p3ZcF1YjZNs (he explains all this within the first 5 minutes).
I think with basic income you would get $2100.
Sorry, no.
And it's a good thing: imagine the inflation rate if salaries were raised by up to 100% overnight...
You're assuming that all that matters is the amount someone earns. If people care about more than just their on-paper income, then they can think:
1: it won't change my income now, but will save me from having to jump through ridiculous, demeaning and counter-productive requirements added to the current welfare program in an attempt to punish "undeserving" receipients.
2: it won't change my income now, but will provide a nice safety net in case I become unemployed for any reason.
1- I don't need to find a job anymore 2- It doesn't really matter if I lose my job, let's take some "vacation"
A bit more about myself : I'm self employed in France, and I earn less than the minimal wage (because I pay 46+% in taxes). But I'm not entitled to any unemployment benefit if I stop working. I would greatly benefit from a 1000€/m Basic Income, but I KNOW it's unfair because someone else will have to pay for it. I KNOW I have to work to earn a living.
We (almost) have Basic Income in France, it's called RSA (450€/m). That's why I'm paying 46+% taxes. That's social taxes, not income taxes (almost 50% of the population in France don't pay income taxes).
A healthy and minimally secure citizenry can be a public good just as much as roads and armies, which are also paid by taxes.
I want this.
> A healthy and minimally secure citizenry can be a public good just as much as roads and armies, which are also paid by taxes.
As a very narrow and specific (and not necessarily the most important) example of this, in any nation which may rely on conscription and/or mobilization of volunteer citizen militias in time of need, a healthy and minimally secure citizenry is, among other public goods, directly related to military capacity.
That's equivalent, everyone knows government gets its money from taxpayers.
That's exactly what he wanted to emphasize.
People think government has some magical, limitless supply of money available to them, when in reality, it's mostly just money that's forcefully confiscated from everyone.
In other words, basic income is a zero-sum game, but not without its consequences. It's alright not to go into printing or loaning money here, both of those lead to ruin too.
How high would tax rates have to be, to collect enough money for basic income? How many businesses would just shut down or get the fuck out, leaving that much fewer businesses in the country to shoulder the burden? That's a feedback loop right there. The remaining businesses would be just that much more likely to get out too, and then the next remaining, and so on.
The idea of basic income is not rooted in reality, but entitlement and the need for "security", no matter how illusory it might be.
I think that 90% of people (100% on HN) understand this.
> How high would tax rates have to be, to collect enough money for basic income?
They would need to be significantly higher, but significantly more money would get back to the taxpayers too, so the aggregate demand would remain about the same, so businesses would be ok.
BI, if set up properly, can redistribute wealth in a very similar way as it's happening today (in Europe). The only difference would be side effects like lower fear of unemployment, which could make the labor market much more liberal.
> I think that 90% of people (100% on HN) understand this.
Really? Well, then you should understand that the feedback loop I described alone is enough to make BI unsustainable, and thus not worth pursuing. But it doesn't seem you do. There's another feedback loop too: the more people are just sitting at home, the more will want to join them, and so on.
From another comment of yours: >> Do you think that wealth redistribution is wrong?
Do you think it's wrong for a mafia to extort money from you? -Yes? Well then, do you think it's wrong for the government to do the exact same thing?
You see, you'd pay "protection money" under threat of violence, but you also pay taxes under threat of violence. Spare yourself the mental gymnastics here. Forcefully dragging you to jail or just plain shooting you if you resist does actually count as violence.
Where do you think the "wealth" to be "redistributed" comes from? -Why from extortion, of course. Would a mafia's extortion be perfectly fine as long as they used your money "efficiently"? Heck, their spending of your money increases aggregate demand, so all is well!
>> There are many arguments suggesting that zero wealth redistribution is not the optimum. >> I'm convinced that wealth redistribution leads to higher aggregate utility. Whether it leads to higher nominal growth, I don't know.
You throw around these terms as if they meant something here in the real world, let alone after acquiring the wealth to be distributed through blatantly immoral means. What makes zero redistribution of stolen loot "not optimal"? I'd say it's actually precisely the optimum.
"Higher aggregate utility", "aggregate demand"? -Well there's Keynes again. False voodoo economics meant to justify/rationalize State spending and taking on ever more massive debt loads until, of course, eventually the nation's extortion income is wholly consumed in paying interest and the house of cards falls down.
Does an economy imploding help the poor? Does currency debasement and inflation (ie. loss of purchasing power) help the poor? Why no, no they don't. Quite the contrary, but those two are what governments are causing with massive printing and borrowing and using money they don't actually have.
> Really? Well, then you should understand that the feedback loop I described alone is enough to make BI unsustainable, and thus not worth pursuing.
This was probably unclear, but I meant that people understand that goverment gets its money from the taxpayers.
> There's another feedback loop too: the more people are just sitting at home, the more will want to join them, and so on.
Perhaps, but I personally believe that this feedback loop is negligable.
> Do you think it's wrong for a mafia to extort money from you? -Yes? Well then, do you think it's wrong for the government to do the exact same thing?
It's definitely not the exact same thing, one of the differences is that it's what the society democratically decided. You can always move to a different country or convince people that they should vote for abandoning taxes.
> "Higher aggregate utility", "aggregate demand"? -Well there's Keynes again.
Higher aggregate utility is a term I created by myself (and I'm apparently not alone), it has nothing to do with Keynes.
> What makes zero redistribution of stolen loot "not optimal"? I'd say it's actually precisely the optimum.
1. Decreasing marginal utility of money. 2. Low income jobs are usually harder, less respected and less enjoyable. 3. Progressive taxes decrease inequality. This has many positive effects on society.
> This was probably unclear, but I meant that people understand that goverment gets its money from the taxpayers.
The guy's point was that money has to come from somewhere, in this case, from taxpayers. The next step, then, is to think about the consequences of confiscating a massive amount of money more than before.
> Perhaps, but I personally believe that this feedback loop is negligable.
Your personal beliefs don't affect the way people behave: they pursue their personal gain. Business owners (ie. tax donkeys) will just fuck off if taxes get too onerous, and people will just stop working if it's just not worth it. Both feedback loops are very real, and will make any BI implementation unsustainable, and again, thus not worth pursuing.
> It's definitely not the exact same thing, one of the differences is that it's what the society democratically decided
You can't base any arguments on The People collectively deciding anything when the fact that taxation is extortion (or robbery) has never even crossed the mind of 99% of all people anywhere. Besides, only you can make decisions for yourself - no one else has the right to do that, because no one else is you. You own your own body, and your actions, and so does everyone else. We're all just individuals - not The Borg.
> Higher aggregate utility is a term I created by myself (and I'm apparently not alone)
Well, what do you think it means?
> 1. Decreasing marginal utility of money.
Does it actually decrease though? Clearly, if you want to eat an apple, the marginal utility of the next one is lower than the first's.
But if you first get 100 dollars, and then get 100 more, are the second 100 dollars less useful to you than the first? Well no, they're just as useful. Even past the point where the amount of money you have is not really meaningful wrt your everyday life anymore, each additional million dollars will increase your "security utility" just as much as the previous one.
So it's highly doubtful that money has decreasing marginal utility, and it's unclear where it might kick in. Maybe you'd like to explain what you mean, and why it's meaningful considering what we've just covered?
> 2. Low income jobs are usually harder, less respected and less enjoyable.
So what? Gain experience, and new skills, and get a better job?
> 3. Progressive taxes decrease inequality. This has many positive effects on society.
You're engaging in Socialist thinking. There's no class warfare (without the State, at least), and it's perfectly fine for anyone to get rich through pleasing their customers or just working hard etc.
You have your property, and others have theirs. That's it. You have no right to take anyone's stuff by force, and vice versa. This is important. Even police officers are just humans like you and me, and have the exact same rights as us.
People work for survial or greed. This just takes the survival part out of the equation. People will still work because they will make more money.
Nice to see but what is with the mountain climber image which reminds me of someone who would have plenty of free time and cash for such a hobby.
Is the idea to be "upwardly mobile" ? I mean I have to grasp for that idea.
No one likes looking at poor people.
I'd not heard of the basic income concept until now so my reaction might be naive, but what benefit could possibly justify the collection and redistribution of a fixed amount of cash to everyone, regardless of their situation?
For example, if 1 person in 10 is thirsty, what benefit derives from giving water to all 10 versus the 1 - isn't that simply a wasteful distribution of resources?
Even in the extreme case where a blind distribution of resource would save a life I cannot see it being superior to a distribution based on actual need.
Distribution based on need (means-testing) seems to scale poorly. You need a system to determine means, which at governmental scales is inevitably bureaucratic, resource-intensive, and prone to cheating.
Point is, it is always possible to take a means-tested system and turn it into a universal system without changing the final distribution.
Take your thirst example. Say nine people have 100 units of water and the tenth has 0. A means-tested welfare system might involve taking 5 units from each of the 9 people and giving it to the tenth, leaving the nine with 95 and the tenth with 45. Now, instead, we increase the 'tax' from 5% to 50%, and give everyone 45 units. The resultant distribution is the same (the nine have 95, the tenth has 45), but this way involves no means-testing.
OK, so the numbers here are a bit unrealistic, but the point is, given any means-tested system you can always make it universal and just make the tax system more progressive to cancel out the benefits paid to the non-needy.
In quite a lot of Europe we have social support schemes that are supposed the same net effect.
Except if you are unemployed for more than X. Or if you have more than a minimal wage on your bank account. Or.. Or.. Or..
All these exceptions are meant to cut social support from people who are not entitled to it. While in reality they usually hurt people who have no means to be really productive.
Quite a lot of resources are spent on edge cases, which decreases efficiency and transparency. Thus making these schemes ineffective for what they were designed to do.
I think that basic income is an awesome idea and should be at least tried so we can see if it works out in practice. Especially because we can afford it.
> Especially because we can afford it.
You mean you can afford it. How do you know if I can afford it? By necessity, to implement this, you've got to take money from people and give it to other people.
Your assumption is that by rights any one in the category of those losing money, is making so much that they lack any moral claim to it.
We already do that.
Throughout Europe we take 40-50% of personal income + taxing corporations to fund common good programs.
I will argue that we needn't take any more than we take currently. Expecting that taxes would drop because of BI is ludicrous. However less of our money may be wasted and more of the needy may be served.
You don't need to trust my word. Run some numbers[1].
[1]: https://googledrive.com/host/0B68HCFLtgK_QTHRGWGZBTkRNQjQ/UB...
Fair point. Still not sure it's such a great idea though...
I am not sure either. However I think that it is absolutely necessary to test it out in practice.
To construct a trivial example, say we give every citizen $2000 a month in post-tax basic income. Of course, most citizens have jobs and other sources of income. To make math easier, assume this government has a flat income tax of 20% If you earn $0, you are pay $0 in tax and get $2000 in basic income. If you earn $9000, you pay $1800 in taxes and get $2000 in basic income, netting you $200. Basic income washes at $10,000, and after that serves only to defray your tax costs until it is hardly noticeable.
I can't speak to what levels of taxation and basic income might be useful -- these ones have been selected for convenient math -- but that's the general idea of it.
Or, in terms of your water metaphor, if one person in ten is thirsty, we give water to all ten, but we also take from the nine, so they actually see a small loss. The water didn't come from nowhere.
FYI, for the States at least, $2000/mo is too high. It always strikes me... I don't think people who make good money often understand just how poor most people really are. The lower 50% of U.S. tax payers only average around $15,000/yr. If I were to guess, approx. 50% of the poverty level would make a good peg. I also think parent should get additional allowances for no more than two children.
That said, the system has a tendency to balance itself (the marvels of free-market capitalism when allowed to work properly) so no mater how much was granted per month, the system could self-adjust. Unfortunately there are so many entrenched interest gumming up the works these days, I'm not sure anything about the markets are really working "freely" as they should.
Parents should get no allowance for any children, and children should get the same benefit as everyone else.
This is the answer that made most sense to me - I'll attempt to paraphrase;
The net benefit of basic income for an individual tends to zero (percent) as the individual's income rises.
Basically, it's super-expensive to check actual need, and by removing the administrative expense related to it you end up getting a much more efficient system. There's also the side effects of making part-time employment easier and speculative/entrepreneurial projects safer. To match your analogy, if it costs 11 units of water to determine who is thirsty, then giving water to all ten costs 10 units, and giving water to just the one costs 12.
I think the hope is that it is sort of like digging a well.
I will never support this idea. This is kind of thinking is extremely nationalistic: I am entitled to free money because I was born in XYZ.
On top of this, this idea has very weak economics fundamentals, there is no prove that growth comes from redistributing wealth. There is plenty of prove growth comes from innovation and innovation comes from people actually working.
We are in denial. The whole Europe is in denial. We don't realize the only way out of this mess is working more and cutting public spending. Instead we propose the exact opposite.
> This is kind of thinking is extremely nationalistic: I am entitled to free money because I was born in XYZ.
It's just a technical change in the way we redistribute wealth. Do you think that wealth redistribution is wrong? There are many arguments suggesting that zero wealth redistribution is not the optimum.
> there is no prove that growth comes from redistributing wealth
I'm convinced that wealth redistribution leads to higher aggregate utility. Whether it leads to higher nominal growth, I don't know.
> Instead we propose the exact opposite.
Basic income would make public spending more effective.
It does seem strange, like we've given up trying to bring people along on the unstoppable train of progress, and are now content with simply funding people to be alive, while those who were lucky enough to be taught drive and determination real the most massive benefits of this world.
True wealth is discipline and knowledge. We should be figuring out how to teach people to reach for their dreams and also figure out how to sustain themselves (and others who share those dreams) through their work. Because truly outstanding things in this world are almost always rewarded.
Why is economic growth the goal over exploitation. You say it's nationalistic but why should what family I'm born into give me any more freedom/advantage. Completely changes society. Automation happens alot faster in this scenario. Fast food dispears why would someone wait on another if tehy can survive without being someones servant?
"this idea has very weak economics fundamentals"
I'll take Milton Friedman's word on that over yours.
Good to see someone thinking for himself here.
If I were thinking for myself I would support this idea and then go on basic income for life, I can live with very little, so why not?
You seem to be talking about "pursuing personal gain", whereas I meant thinking for yourself in contrast to group-think / herd-mentality.
The goal has been set at 15,000 EUR and the duration of the campaign at only 14 days. There are still 12 days left in this campaign and the donations keep coming in.
Maybe I'm missing something, but if they want to gather signatures - why not add a link to the petition so people can actually sign?
Here is the link: http://sign.basicincome2013.eu
Because you need to be focused on one goal only. This campaign's goal is to reach 15,000 EUR. The target audience for this particular campaign are people who already signed the initiative and who are mostly informed about the Initiative.
Hence you post it to HN, who have all obviously signed the initiative? Sorry, but that seems like a missed opportunity.
The problem I envision with a basic income model is that it could have an inflationary effect - shifting the baseline. The only way this doesn't happen is if our basic income economies exploit non basic income economies - and even this wouldn't prevent housing, energy, and (non artificially) scarce items from inflation.
Why do you expect inflation? Inflation only occurs if the source of the money comes from creating currency. If it comes from taxation then you're not increasing aggregate demand at all, you're just eliminating the large disincentive to seeking employment created by the discontinuation of government benefits if you succeed.
sorry, price inflation. Supply and demand.
There is no difference between "inflation" and "price inflation."
Suppose that yesterday you received $50 from government assistance programs (e.g. food assistance) but today you receive $50 as a basic income and no food assistance. You have the same amount of money to spend.
Suppose that yesterday you received no government assistance and paid no net taxes but today you receive $50 as a basic income and pay $50 in new taxes. You have the same amount of money to spend.
There will be some people who, on net, receive more or less from a basic income (less the taxes required to pay for it) than they do now -- mostly the very rich would pay more and the working class would receive more -- but the net amount of money in the average person's pocket remains the same. The difference is that you don't have the disincentive to seeking employment that the current unemployed do when they lose government assistance by taking a job.
One important advantage of BI would be that it would allow the labor market to be more liberal (especially in Europe, I don't know about the situation in the US). Employees wouldn't need to be protected that much, because they would be less scared of being fired.
If you are EU citizen, don't forget to sign the petition: http://sign.basicincome2013.eu
With little administrative overhead, this should be a more effective way of stimulating demand than QE.
Even if I assume your premise, why would you assume that this is a more effective way of stimulating demand? (I'm not necessarily disagreeing its just not obvious to me that one mechanism is better than the other.)
As I understand it, the QE strategy is for the central bank to buy bonds. Bonds become overbought, so investors shift to stocks and shares, lifting the stock market. Investors benefit, as do companies seeking to raise funds through share issues, but uninvested consumers do not. As a result, the stock market goes up, and borrowing costs for companies go down, but the "Real" economy stagnates. Companies can borrow easily to fund expansion, but have no real market to sell into, because the stock market is disconnected from the underlying "main street" economy. Basic income provides another mechanism for Keynesian reflation, but targets the "real" economy rather than the stock market, so stimulates actual demand, rather than pumping up the bubble. Of course, inflation is a massive risk with both of these strategies ... and may happen more directly and more quickly with the basic income strategy rather than with QE ... so on second thoughts ... it might not be too great an idea.
People voting themselves bread. I'm sure this will turn out well.
Technology and automatization of production is changing everything, the more we raise productivity the less people can satisfy our needs for products.
Do you propose we just start shooting people who are below the skill level required for sustaining the economy?
I for one would like to avoid living in a Logan's run type of universe. Thank you very much...
I have no idea how this is going to turn out if it gets passed, but I hope it does. I'd much rather Europe be the guinea pig.
Are people not allowed to do that? In democratic regimes?