You're viewing a single thread.
Or we could, you know, give free housing, healthcare and food to people who need them. UBI only works in a perfect society where the market doesn’t take advantage of it.
UBI only works in a perfect society where the market doesn’t take advantage of it.
Sorry, but that is simply not true. Alaska has had a form of UBI for decades funded by oil revenues. It decreased inflation. Canada also has a basic income for families that also hasn't caused inflation.
With the introduction of this dividend in 1982, Alaska went from having the highest rate of inflation in the US to the lowest. Source
Not to dispute it, but the sources for the Alaska argument are a Twitter post made by the organization itself (which just says that businesses will have discounts when the check goes out) and a Medium post.
And the source used for the argument in the Medium post is a link to another post made by the same author. His proof that UBI reduced inflation is... A line graph of CPI comparing Alaska vs the US.
If the oil dividend caused the decrease in inflation, you would be able to find many scholarly articles on the subject, yet the entire proof is a single graph.
His proof that UBI reduced inflation is… A line graph of CPI comparing Alaska vs the US.
I did do some more digging and found that the graph from Scott Santens is supported by data from the stlouis Federal reserve. See stlouisfed graph
I think its largely common sense that businesses would have sales to when money goes out. The same thing happens when refund checks come out. The author is of course biased, but that it not a reason to discredit the data. Are you suggesting he fudged the numbers for the graph?
If the oil dividend caused the decrease in inflation, you would be able to find many scholarly articles on the subject, yet the entire proof is a single graph.
No one is claiming the dividend caused it because causation is notoriously hard to prove since https://en.wikipedia.org/wiki/Correlation_does_not_imply_causation. The author simply provides evidence in a graph that the after the dividend (Alaska's UBI) Alaska had a noticeably lower inflation rate compared to the rest of the US. Graph in question Take a look and make your own conclusions.
We're talking about vastly different sums of money and access to infrastructure.
Alaska's 1600 per year is more akin to a tax refund. It's not dramatically changing anyone's income and if it is, they're barely scraping by regardless.
Alaska is also so remote that everything is more expensive.
If 300 million people suddenly had an extra 24,000 dollars to spend in a year, you don't think every business in the country would be scrambling to get their cut? Most companies see you as an obstacle between them and their money that you happen to be holding.
Alaska’s 1600 per year is more akin to a tax refund.
It may be on a smaller scale than is traditionally advocated for with a UBI like program, but it is a UBI. According to Wikipedia, the PFD(Alaska Permanent Fund Dividend) is a Basic Income in the form of a resource dividend. Any adult Alaskan resident is eligible for it whether or not they pay taxes. It's not a tax refund.
If 300 million people suddenly had an extra 24,000 dollars to spend in a year, you don’t think every business in the country would be scrambling to get their cut?
Of course they would be. That is why a lot of business offer sales, when the Alaska dividend check go out. They want to convince you to buy their crap. When businesses want money, they have to convince people to buy their stuff via sales and promotions. That usually means lower prices.
Ok and little league and MLB are technically the same sport but 8 year old Billie Jr isn't going to be throwing a no hitter at Fenway any time soon.
Technically being the same thing does not mean it will function the same way.
Perfect is the enemy of good in this case. I would much rather have a $100 UBI just to test out the system than have no UBI ever happen because people argue it has to X amount. It is however very important to tie it to inflation so it doesn't get effectively nickeled and dimed into continual cuts like the minimum wage largely has in many areas.
Yeah, it's kinda funny. The research papers tend to cite things like "wealth flight" and "housing price plummet" as economic concerns about UBI, yet whenever folks talk about it, we're all afraid of landlords just raising rent.
I'm not sure on either of them, but watching everyone argue both extreme opposite possible outcomes for it is funny.
I wouldn’t really count the Canada one since it’s not truly “Universal”, but the Alaska one is interesting.
It honestly seems like it’s talking of some utopic society (“Businesses would continue to compete for our money by offering high quality at reasonable prices” - when has that ever happened in the past 20 years?), but it does bring some sources to the table so probably has a point, even if I still see that as overly optimistic.
Anyway mine was just a digression, I’m not going to vote against UBI or anything similar if it ever comes up, I think there’s better solutions but I’m definitely not letting perfect be the enemy of good.
Graph showing the last paragraph of my answer. I had to reply with another instance as lemm.ee has disabled images.
You can check the graph from the stlouis fed data and it lines up.
UBI only works in a perfect society where the market doesn’t take advantage of it
Says who?
Macroeconomics? If you increase the pool of money people compete to spend on a good or service we can expect the value to increase.
It depends how it's funded. Strictly speaking that's only the case if it's funded monetarily by a central bank printing more money for a government to fund UBI. For example this is how most countries funded businesses and individuals during the pandemic and what has lead to the inflation you're referring to. Otherwise there is the same amount of money in the economy, it's just been fiscally re-distributed using a UBI policy. You might still see some inflation in some parts of the economy due to rising demand but if people can afford more, rather than less, this inflation no bearing whatsoever on people's actual prosperity. If funded fiscally UBI would outstrip any inflation it might incur and therefore actually represent real-terms deflation for the vast majority of people. As a side note, what we are getting at the moment is the exact opposite: money was printed in huge amounts by central banks during the pandemic which largely ended up in the pockets of people who bought up assets like housing and are now out-competing everyone else in the market and extracting yet more profit. It might feel like inflation to us because food and bills have increased in value faster than our wages, but the wealthy have actually been experiencing real-terms deflation because their stash has been growing faster than their costs.
"If funded fiscally UBI would outstrip any inflation".
Source for this claim please? Its been years but I seem to recall the Roosevelt Institute paper Yang relied on saying something different (worth noting Yang misrepresented this paper).
I think the best evidence for this claim is past experience with a UBI via the alaska ongoing UBI. Federal reserve graph showing that since alaska implemented its UBI (in 1982) it has had lower inflation than the US at large.
I don't have an academic source; it's my own prediction based on a) what I've seen/am seeing in the economy and b) my own personal finances.
I'll dig it up later but I suspect you have that backwards. As I recall the tax funded UBI produces little to no growth so it shouldn't cover inflation
This is actually the opposite of what studies seem to be suggestion.
The fear is, instead, that it will reduce values, especially housing, and that businesses and wealthier individuals would move away. Admittedly, if it's truly universal, then there would be nowhere for them to move. But the real, often-forgotten underlying gain is that it would create some leverage for employees seeking jobs and raises.
Of course, an "unemployed-only" income would create more employee leverage, possibly matching or exceeding the leverage provided by unions because the employee could afford to strike indefinitely.
"Reduce values"
Which are a fictional thing we invented. How awful, a more equal society where people cannot as easily be superior! Do people really fear such a thing?
I'm really not sure what you think you're getting out of this reply. Or hell, what you're even trying to say. But here's my college try at replying anyway.
Before I get to line-items, I'd like to reiterate that you're arguing for "pay everyone money" in response to "pay people who aren't working a living wage" and acting like giving money to the rich makes a more equal society than that. If I had $50k/yr guaranteed any day I wanted if I quit, I'd have a whole lot more leverage to get another $1000/mo from my employer AND be treated well.
How awful, a more equal society where people cannot as easily be superior!
That would be socialism, not a UBI. The economic concerns about UBI are that it will weaken the average quality of life and that every implementation ever pitched has a fatal flaw. Yang's, for example, would hurt the poor and middle class while not actually redistributing any wealth from the rich. Models also suggest they will be job-killers, and not in the obvious way of giving people leverage.
Do people really fear such a thing?
Yeah, they're so afraid of socialism they try to create capitalist equivalents like UBI
Yang's issue is he flipped the tax funded UBI and deficit funded UBI's growth numbers. There is almost no growth from UBI unless it is money falling from the sky.
Yang's issue is that he wanted to fund UBI by using it to eradicate welfare. And there were a dozen very solid problems with that he was unwilling or unable to meaningfully address. Some of the families who would need his UBI the most are the same families who would have to opt out because their welfare is valued at more than it.
I used to be all-in for UBI in general, but over the years (thanks in part, but not entirely, to Yang) I walked off that ledge. The government should be guaranteeing housing/food/healthcare the same way they guarantee education. What they should not be doing is cutting a check and shoving fingers in their ears in the welfare equivalent of Privatized Social Security.
What people don't want to accept is that under UBI, there will still be comparable homelessness to what we see now because a leading (perhaps the #1) cause of homelessness is addiction. The government subsidizing rental and home payments without means-testing would allow even addicts to have a place to sleep at night. Even they deserve that. And yes, there's inflation "risks" with incentivizing housing or food, but it's no more or less than with UBI or with just the FCC approving another big merger.
Im the sameI was all in until I did the deeper dive into the literature. Now I see it as realistic as jetpacks.
I think it's realistic. I just think it's not the right solution.
UBI is a massive undertaking, but so is Social Security, Universal Healthcare, or a modern military. The GDP is $23.3T, but the current tax income is only 12-15% of that (approx $4.1T). Yang's UBI would cost a whopping $4T, but here's the missing link. As much as we whine like little bitches about taxes in the US, we are quite literally middle of the pack for taxes as a percent of GDP. UBI is realistic, but it would require a full overhaul of our economy.
I just don't think a full overhaul of our economy is worth the benefit of UBI. $25B could end hunger in the US, and $700B would socialize food entirely at no cost to individuals. Somewhere in the middle, we'd probably get 90% of the benefits of socializing food with a lot less costs. Housing is the same situation (ironically, the estimated cost to end homelessness is also about $25B, though I don't know what "subsidized housing for all" would look like). We could do both AND have some money to incentivize being unemployed to counteract job leverage (the one big win in UBI imo) all together in $1T or less, a much less disruptive overhaul for more return.
And we could throw in universal healthcare for good measure. Yeah, there's a tax cost, but studies show it pays for itself in individual savings and economic growth
You can't just cite an entire field and call it an answer. Especially when than field is basically a pseudoscience.
Lol ok buddy. Tell us more about your complete lack of understanding of what science is.
If you make the maths, the direct inflactionary effects of UBI are quite small unless people were getting tens of thousands of dollars per month, and there are indirect effects pushing in the opposite direction (for example, fewer loans hence less money getting created by banks).
You're making claims that an entire domain supports your conclusion but haven't even gone to the trouble of making the maths to confirm it - you just assumed.
For example the "average household wealth" in the US is $1,059,470 and the average household size is 2.5, so an UBI of $500 per month for every man, woman and child of the United States (rounded to 300 million because I couldn't be arsed to find the exact number) would depreciate that wealth (i.e. inflate its nominal worth) by about 1% per year (assuming 12x UBI payments per year). This is are only the first order effect, as indirect effects push in both directions (for example, it will push salaries at the low end higher, which is inflationary but not by much because it's only lower salaries being affected, and it will reduce number of loans issued which reduces money creation and is thus deflactionary but again the strength of that deflactionary effect depends on actual proportion of loans that are not issued due to UBI making the money available).
All together macroeconomics does not confirm the effect you claim it does (an in fact the Alaskan experiment shows the opposite) but even if you only consider first order effects, it shows an inflactionary effect which is around half of the FED's anual inflation target, so a mild effect and certainly not justifying the statement that UBI "only works in a perfect society where the market doesn’t take advantage of it".
Macro is the field that would support the idea that giving people more money would increase the sale price of things like housing.
I don't need to math out the inflationary impacts of UBI to make the claim that Macro backs the idea that giving everyone more money will increase the costs of housing. That's historically demonstrable.
The Alaskan income bonuses aren't relevant to this because they aren't large enough to have distortionary effects.
Inflation and generally every market trying to push the limits of how much they can exploit their customers in every possible occasion.
I mean, if I have to choose between the current situation and UBI I’ll obviously go for that one, I’m not 100% sure it’s not going to work. But if we have to try and radically change society with a very expensive procedure, I’d rather they do it in the most foolproof way possible.
It is vastly simpler for the government to send everyone a check or deposit than to provide free housing, healthcare and food to people and decide who is 'worthy' of receiving them. And let's be honest most social programs in America are the first thing on the chopping block. At least with a UBI, its very easy for the average person to tell when its been cut. If only a few 'poor' people participate in a program, it will be a lot easier for the government to cut it than if every legal adult in the country gets it.
Sadly, whipping on people who recieve benefits is a useful and convenient tool to have in reserve for politicians who are failing and need to deflect attention from that.
Yup. I recieve them because I am disabled with a progressive condotion and of course, poor. But I'm lumped in with those called "leeches". I'm just trying to feed myself and my family. I will shamelessly swipe my EBT card as many times as I must.
I mean, free Healthcare is already being done in most of the first world and free housing is too, albeit in fewer places and with restrictions. Free food is trickier but I’m sure there’s a way to figure it out.
Imo the issue with UBI isn’t that it would get cut, it’s that it wouldn’t get raised according to inflation. It already happens with “conventional” income so I think just flat out giving the product with no adjustments needed is better, it’s not like as time goes on people are gonna need “more houses”.
It is not like it has to be either or anyway. I would certainly support healthcare and other similar programs but would caution against making them overly restrictive. The restrictions of the programs are the problem as they are excessively restrictive to stop people from using the programs. Effectively these restrictions mean only ~1/4 people eligible for assistance actually get it.
See this paragraph from the post authors blog.
Before the pandemic even hit, 13 million Americans were living in poverty entirely disconnected from all federal assistance programs. The best functioning program is our food assistance program which reaches 2 out of 3 people in poverty, and lasts for 3 months every 3 years. Our worst is our temporary assistance for needy families program which varies by state, and in my home state of Louisiana reaches only 4 out of every 100 families living in poverty. Our disability assistance reaches 1 out of every 5 Americans with disabilities, and the average waiting time to qualify is two years. Our housing assistance reaches 1 out of every 4 Americans who qualify. Our unemployment insurance reached about 1 out of every 4 unemployed people in 2019. Over and over again, with targeted program after targeted program, our safety net tends to let three out of every four people fall right through it.
I would just prefer a UBI like program over other alternatives since its focus is on eliminating burdensome restrictions that serve to discourage people from using the existing programs.
I have a progressive illness, my brother in law moved in with myself and my husband. They are both disabled as well, but only one of us can work full time. We would be absolutely fucked without EBT. I am so thankful for it.
Imagine the quality of life of the disabled population if they didn't have to try so hard to get these things. It's so fucking hard when you can't work or can only work a little bit.
Put free education there and we are Gucci.
I am considering skipping trade school, which would be valuable, because I can't even afford the $10k program.
UBI only works in a perfect society where the market doesn’t take advantage of it.
Please expand.
You and everyone you know has an extra $2k dollars per month from UBI. Your landlord raises rents because he knows everyone has 2k more.
In a perfect world your landlord would not be greedy and take that money. He would have actual competition from other landlords willing to rent. We don't live in a perfect world.
Increasing the money supply causes inflation.
That's just a repackaged argument against minimum wage. It's wrong there, too. Market competition is a thing, even for shitty landlords.
In the present day, the vast majority of the money created (over 90%) is created by banks when they give loans (I kid you not: you can read all about it in the paper "Money Creation In The Modern Economy", from the Bank Of England) so it actually makes sense what seems to have happenned in Alaska (as pointed out by others) that in overall UBI reduced inflation if UBI ended up reducing the number of loans people took.
This effect exceeding the inflation from UBI is probably only possible because it's a fixed amount per-person rather than a percentage of all the money in circulation, so it's a small percentage of all the money in circulation (a $660 UBI for every man woman and child in the US would be 1% of M3) and a tiny percentage of all the money in existence (i.e. including wealth held in various non-monetary forms).
So yeah, UBI would create some inflation, but not as much as you seem to think it would and it has side effects that work in the opposite direction which, judging by the experience in Alaska, are strong enough to offset the direct inflactionary effects of UBI.
Spoken like someone who has studied large-scale implementations of UBI. Oh, what's that? There aren't any? Hmm.
