Comment by germinalphrase | Hacker News Reader

Comment by germinalphrase | Hacker News Reader

Parent Full thread

I've heard a counter argument that basic income (and gov't funded social welfare, more generally) may actually reduce the amount of time/effort/money people personally expend on volunteerism/philanthropy.

The thinking is that the existence of extensive gov't social welfare programs make people feel as if they have contributed (via taxes) and this reduce their personal responsibility to work on behalf of the less fortunate. Likewise, it undermines their empathy for the less fortunate because "well, they already receive welfare - so if they remain poor it must be because they [are lazy/addicted to drugs/antisocial/etc.]".

I don't know if I agree with this argument; however, the cultural ramifications of BIG are certainly an important question to wrestle with.

Edit: clarification - the argument is that this belief ("I've done my part") is extended because BIG covers all sources of welfare rather than targeted toward specific populations or purposes (children, mothers, food, etc). When everyone receives social welfare payments (rather than just specific kinds of people) it more fully extends the "I've done my part" feeling to the larger population (rather than specific slices of the population) and reduces overall charitable action.

This is a strange argument, because all of that rhetoric is status quo - people do argue (or argue via proxy; the words are different, but the substantive claims are the same) that people already receive enough. If that's the problem with universal basic income, then the only change is that such vulnerable people end up with more money, which must be a good thing.

I suspect basic income would lead to an increase in inflation in the current environment. Wouldn't many people continue to work having received their stipend in order to obtain a higher standard of living than previously possible? (I know I would) Then wouldn't it follow that inflation would then take place all but entirely removing the utility of the basic income? In my opinion the jury is still out in regards to actually increasing standards of living over decade long time frames. It is entirely possible that it harms vulnerable people more than it aids them. More data is needed.

The inflationary impact of UBI is rarely discussed but I think is very important. Unless it was paired with a mandatory salary cut (cue the howlers) I don't see how that would not happen.

Well UBI would naturally have to come along with greatly increased taxes on higher income levels, and property taxes would remain. I think the biggest issue of UBI is the transition period. How do you switch over?

The salary cut is also problematic. If you create a maximum wage that is too low you'd have employers competing for a smaller pool workers without any way to incentivize them. I suspect a great many jobs would simply become impossible to fill (oil worker, trash truck driver, construction laborer, etc). Perhaps you can make the amount say one million annually (adjusted to the now inflated dollars) but that likely wouldn't curb inflation all that much as few people are paid that well and would destroy the very tax base that is intended to fund the basic income in the first place.

I'd support a move to a "Star Trek" economy but I just don't see how you pull it off.

I'm not sure this is so. Presumably this is offset by tax increases- which means no new money is injected into the system. Instead, it's a literal redistribution lf existing money.

While there might be some inflation as the supply of money available to those with low- to median income increase spending, I don't think it would be sufficient to offset the base change.

On the other hand you would need to significantly increase taxes on upper-middle+ brackets to ensure no new money is introduced. After all they receive BI under this system too, which they'd effectively have to pay back and then some....

I suspect basic income would lead to an increase in inflation in the current environment.

How? It's the same amount of money, just redirected from existing welfare programs and redistributed via taxes.

Then wouldn't it follow that inflation would then take place all but entirely removing the utility of the basic income?

If you're making $10k/year and get another $10k from basic income, you'll be much better off even if somehow there is significant inflation.

Basic income isn't a magic wand to make everyone richer. It's an efficient way of guaranteeing that everyone can cover their basic needs, without the inefficiencies and harmful incentives of the current system.

There's no way to make the numbers work if BI is funded by just redirecting existing welfare programs.

Right, any reasonable implementation will result in people with higher incomes having their taxes increased by more than the BI amount. And I think that's a trade a lot of conservatives and libertarians would accept: more redistribution in exchange for less intrusiveness and greater efficiency.

Giving everyone basic income of $10k in the US would be about 2.5T annually (assuming children get nothing). Current tax revenue is only 3.6T and we spend $200-$300B on welfare (assuming you exclude Medicare/Medicade) so it would be a 10x increase in spending on welfare and a 60%-70% tax increase.

I'm not even that conservative and I think that's ridiculous for an amount of money that doesn't even cover the rent in most cities.

Conservatives and Libertarians would never accept BI. Look at how hard they've fought welfare in general.

>How? It's the same amount of money, just redirected from existing welfare programs and redistributed via taxes.

The average spending per welfare recipient is roughly $25 a day[0] in the US that adds up to $9125 per person. 23%[1] of households currently receive some type of government benefit, while half of working individuals make less than 30 thousand dollars a year[2]. If you wished to provide basic income to just those making under 30 thousand a year my back of a napkin math says you would at a conservative estimate double the current expenditures and that program isn't basic income as much as welfare expansion.

>If you're making $10k/year and get another $10k from basic income, you'll be much better off even if somehow there is significant inflation.

If you doubled everyone's salaries, due to supply and demand, the price of every good would then double. Money is used to purchase goods and services that are produced using a finite set of resources. Those resources don't grow simply because you have printed more money.

[0]http://www.forbes.com/sites/timworstall/2015/05/04/the-avera...

[1]http://www.politifact.com/punditfact/statements/2015/jan/28/...

[2]http://dailycaller.com/2015/10/25/1-in-2-working-americans-m...

Reply on news.ycombinator.com