Comment by colemannugent | Hacker News Reader

Comment by colemannugent | Hacker News Reader

Parent Full thread

When do you stop raising it?

If people could vote themselves more money the voter turnout would be insane. How would anyone control something like that? Anyone who ran against the increases would be easily defeated with something like this: "My opponent wants to take the money you deserve!".

At some point you would be giving people more money than you produce as a country and then it's only a matter of time until the money runs out. Once the money runs out then your government will evaporate as the enraged populace tries to pin the blame on one group.

This of course is on of the central issues with government run wealth redistribution programs, nobody wants less money and they will go to the polls to protect it. Whatever you think of the ACA/Obamacare in the US, once it got established and started paying out there is almost no way to repeal it as no one wants to lose their benefits. Even establishment Republicans learned their lesson and are now leaving it alone after seeing that they angered many Americans who enjoyed those benefits and threatened their chances of being re-elected.

>If people could vote themselves more money the voter turnout would be insane. How would anyone control something like that? Anyone who ran against the increases would be easily defeated with something like this: "My opponent wants to take the money you deserve!".

Yeah, that seems mostly fine to me though (aside from the rhetoric.) If an increase in UBI makes life meaningfully better for enough people and they turn out to increase it that seems like democracy in action.

>At some point you would be giving people more money than you produce as a country and then it's only a matter of time until the money runs out. Once the money runs out then your government will evaporate as the enraged populace tries to pin the blame on one group.

Seems pretty hyperbolic.

I apologize for the hyperbolic tone of my earlier post, I meant to approach this from more of a thermodynamic angle, ie. money in versus money out.

You cannot continually raise the UBI, as this is economically untenable, however there will be significant pressure to raise it every time there is a vote. I haven't seen any UBI proposal that addresses this.

Plus there is another real issue with a true UBI: inflation. If everyone in the US made $100,000 a year then an iPhone would cost $8000 instead of $800 as people could afford to pay more and Apple would adjust their price accordingly. How do existing UBI schemes plan to avoid this?

A UBI scheme can't just create value from thin air; it has to come from either taxes or from devaluing the currency by printing more, which is basically a tax by another name.* Given that fact, there must be at least some class of relatively wealthy people who come out worse off, even after their UBI checks. The bigger the check, the larger that class of people. Since those people aren't idiots, they'll apply political counterpressure against raising the rate.

Because there's still the same total amount of money in the system, (inflation adjusted) prices can't go up too much. According to the Econ 101 model, goods with a fixed supply will probably get more expensive since there are more potential customers wanting the same amount of stuff, but goods with an extremely flexible supply will get cheaper, again, because there are more potential customers to spread the fixed costs over.

* There's also a sort-of-UBI variant where the funds come from monetizing some big nationalized resource and distributing the proceeds (e.g. the Alaska Permanent Fund Dividend). In that case the above doesn't apply, but neither does your fear. Since in that case the pool of money is dictated by the market value of the resource the voters can't directly impact how much they'll receive.

"How would anyone control something like that?"

We know empirically (see your comment, for instance) that some people would vote against a raise. That idea that 'people' is unable to control their passions is not supported by history. Not so long ago, basic income was rejected by referendum in Switzerland.

"At some point you would be giving people more money than you produce as a country"

That statement is meaningless. Any country that run his own currency can produce an infinity quantity of it. The real constrain is what real resources are available in the country. If you spent more that what is available the value of money will go down (also know as inflation).

>Any country that run his own currency can produce an infinity quantity of it.

Obviously, but in reality countries only mint more currency according to a strict schedule to avoid destabilizing their economy. UBI has to abide by this otherwise you will do real damage to your economy.

My statement is not without meaning, you cannot pretend that a country will be able to give out more wealth that it actually possesses. Technically, the US is over this threshold, but we have a massive amount of credit that we are able to leverage.

>We know empirically (see your comment, for instance) that some people would vote against a raise. That idea that 'people' is unable to control their passions is not supported by history. Not so long ago, basic income was rejected by referendum in Switzerland.

In regard to Switzerland rejecting UBI I think the issue is once people are dependent on UBI dialing back payouts is near impossible even if it makes the most sense economically.

Educated voters will reject raises, but this is like saying that educated people will not eat in excess of what they need. In reality, America has lots of people who know better but are still overweight because of the dependency cycle it creates.

Reply on news.ycombinator.com