Every cent of UBI will be absorbed by housing costs absent the sort of regulation that would itself make UBI politically untenable (i.e. because it would not benefit the wealthy.)
I think you're wrong about that because UBI frees people to go and live anywhere. They won't be trapped in lousy housing one bus-ride from their McJob anymore. The only way housing would suck up the entire UBI is if everyone were trapped in a California situation where new housing was impossible.
It gives people an option to "exit" shitty societies.
Unfortunately you'll find a good portion being spent on 20th century drugs, which suck immensely.
But if the people in power are willing to take that risk, then it might be a positive thing.
One glaring flaw is that humans are a social species and calculate rank and favors and grudges almost autonomously. Receiving your "life" from a government stooge is something of an embarrassment to men who've survived cold winters and starvation and dehydration. We like to be "equal" or "respectful" to a gift giver by having the possibility of giving back an equivalent gift.
So in a sense, you have to teach the homeless person abilities which, eventually, allow him/her to reciprocate a gift. Even if the gift was from the government.
Leaving aside any evaluation of the quality of modern drugs...
You raise my one concern about UBI. I'm fairly liberal, and particularly with the rise in automation, I see something like UBI becoming necessary. Unlike some conservatives, I have no real concern about people "mooching" or getting money they don't "deserve". Some WILL mooch, IMNSHO, but not most. And if it generates a society where people CAN succeed if they put forth the effort, I'm generally okay with those that are choosing to be lazy being lazy - just get them safely out of the way of everyone that isn't lazy and make sure they have every opportunity to improve their situation should they try to.
BUT - two of the big arguments in favor of UBI are:
* that it could be cheaper than the social programs of today
* that giving people cash can be the most effective investment (I think it was here that I saw discussion that a program to give the poor of developing nations chickens was successful at a small scale, but couldn't grow because at some point too many people have chickens for the eggs to have much resale value).
My concern is that some people - I expect few, but enough - will spend money and NOT cover their basic needs (food/shelter). If you shrug and let them suffer/die, you aren't who I want to be. If we run all the social programs in ADDITION to UBI you've made it cost more. If you try to regulate how people spend their UBI, you're hurting everyone's ability to innovate their way to greater wealth. If you try to only regulate those that are decided to not be able to spend wisely...that sounds dangerous, having those in power determine what is and who are "wise".
So while I remain very interested in UBI, I'm watching the current and planned-for experiments with great interest to see what problems arise, which problems don't arise, and to see how any problems are handled.
That said, theorycrafting isn't numbers.
Today the US population is roughly 350 million, and we spend 927 billion on social programs between state and federal. That works out to $2800 and change spent per person. (assuming my numbers are correct) That's, as you say, not nearly enough.
Okay, perhaps we can say some large portion of that population is children that would cost less. also families can benefit from shared housing. So let's switch to a theoretical family of four model. For ease of calculations, let's assume large families and small families balance out: $11,200 per (theoretical) family of 4...which isn't the individual poverty line.
So....yeah, you seem to be totally correct. Which makes me wonder what numbers those libertarians in favor of UBI are using?
Actually, how I would implement it is as a refundable tax credit in place of the basic deduction. In other words, if you have no income you receive your full UBI. However, you are taxed on your first dollar of income (rather than getting a tax free threshold as you do today). There is still an incentive to work as you still get to keep 75% (or whatever) of every dollar you earn on top of the basic income, but at some point the amount of tax paid exceeds the amount of UBI received, and you become a net tax payer.
EDIT: The point is that by working the numbers, you can have everyone wind up in roughly the same financial position as today except without the overhead of the various social programs.
I might be persuaded to do that, if it meant that pretty much all social programs go away, and that a lot of laws, agencies, regulation, subsidies and even military spending were cut. With a target of cutting the federal budget by 70%. If course it feels like I have that much coming out of my paycheck already.
1) Even if the marginal tax rate is fairly high, your average income earner will be getting that $18000 back in UBI which makes the effective rate in your scenario more like 5%.
2) The majority of tax revenue comes from the highest earners. A quick google gave me this (from https://taxfoundation.org/summary-latest-federal-income-tax-...):
The top 1 percent (1.3 million filers) paid a greater share of income taxes (37.8 percent) than the bottom 90 percent (124.5 million filers) combined (30.2 percent).
In other words, I don't believe your math is a reasonable approximation of how the budget would work out. If everyone pays the same effective rate as today (including welfare and other social program recipients who can be treated as having a negative effective rate), nothing changes. Also, there is no need to presume a flat tax rate; the U.S. does not have a flat tax rate, now.
EDIT: Also the average household size in the U.S. is 2.53 people, not 4. A naive calculation would suggest that a household of 4 should therefore expect a mean income around $83K.
No, of course, I would not propose that. There are many ways to handle it that effectively amount to the same thing. The UBI could be paid out monthly or fortnightly or whatever seemed good with the tax situation otherwise being the same. Your employer would have to withhold a bit more tax to compensate, but the end result would be the same.
The point is not to argue specific implementation details; it is to offer another way of thinking about it.
We have an entire bureaucracy centered around benefits and making sure if folks have cheated their benefits. I'm sure we'll need some of the bureaucracy still, but it'll mostly be issues receiving their pay instead of having to screen everyone. Fraud will be more limited in scope because there will be fewer ways to commit this sort of fraud (identity theft, not reporting death, and folks inadvertently recieving double payments most commonly).
We'll still need some social programs. UBI simply won't be enough for some folks unless someplace has cheap, affordable healthcare. Otherwise, folks with expensive health needs still need some support. Yes, this will cost some money, but other folks will simply be able to retire and live off the UBI with no intervention. I'm pretty sure this will be cheaper than the current system. This likely goes down or away completely if everyone has healthcare they can afford.
We'll no longer need to maintain things like the SNAP system (food stamps) because this will simply be included in the UBI. You'll no longer have a seperate card to pay for whatever portion of your groceries are included. We can use existing infrastructure for the UBI payments like we already do for other cash benefits.
We could likely have more staighfoward payroll taxes and less paperwork to fill out with those, both on the government side and the employer side. I'm guessing there are other things I haven't looked over. I think overall we'll have fewer employed in this. Now, there will be the cost of the actual money plus distributing it to everyone in the country. This might make up for the savings above, I don't know as I've not done the math.
The point is this: If we can see these sorts of outcomes happening with UBI, then we can realistically estimate the costs and savings of the two systems. It'd take some work and research, sure, but I think it can be done.And for it to come out cheaper.
I keep thinking as well that switching to a VAT/tariff/excise system that included money transfers would be beneficial... Even allow (re)patriation of funds without taxes, while funds leaving the country are taxed.
He pencils it out to something pretty close to 1:1, maybe something like 15% nominal spend increase, but with (theoretically) much greater utility for all concerned.
How about establishing a trust in that person's name where they can't touch the money but it will pay for needed services? Someone like that sounds like they would need professional help...
There's the hardest part about UBI. Its the same thing that makes our welfare systems so awful right now as well.
The terrible fear that if we give people money... they might spend it on stuff we don't think they should.
So, maybe don't believe all test results.
But you have a lot more confidence in their ability to be sneaky than I do. The average person is not very good at lying without getting caught. The average person that lacks any initiative or follow through is worse.
I think a more likely scenario is companies will pop up who cater to providing the needs of UBI dependents. Think about it, if UBI is enough to cover home and food then you could package these together. Welcome to extended stay from hell.
Lets be real, UBI might protect you from going homeless but that ain't the same as having mobility and choice. With more people participating in the market for housing its going to get tight for awhile and you could end up with more sprawl.
Provided there are no location/COL adjustments.