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Comment by AlisdairSH | Hacker News Reader

I think you answered your own question.

Present-day welfare systems have tremendous amounts of overhead to run. In a basic income system, most of that overhead goes away - you don't need an Office of Unemployment Benefits, or a Food for Underprivileged Children program - because everybody gets a check.

Do the savings completely offset the cost? I have no idea. But, it seems reasonable that they could offset a substantial portion. Of course, getting a government to willingly reduce it's size is a whole other problem.

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Eliminating administrative overhead would be a saving, but it's unrealistic to expect those savings to fund a substantial part of a basic income by themselves.

Social Security and Medicare comprise a large majority of social spending in the USA. SS-OASI has overhead costs of 0.5%, and Medicare has around 1%. That's owing to them being unconditional, outside of age. Even their less efficient brethren aren't that bad: SS-DI is around 2%.

Medicaid is much higher (~6% I think) because it is so targeted and is really administered by 50 different agencies on top of the feds. But after that you get to programs that might be super inefficient but just aren't big enough to generate the huge kinds of savings we might want.

> Social Security and Medicare comprise a large majority of social spending in the USA. SS-OASI has overhead costs of 0.5%, and Medicare has around 1%. That's owing to them being unconditional, outside of age.

Social Security is not unconditional; both whether you are eligible at all and the benefits for which you are eligible are based on your history of qualifying contributions, not merely your age.

The Social Security Administration considers interest on its special treasury bonds as pure free money (negative overhead). That's plainly ridiculous, as it's just tax money that came from the general fund.

> Medicaid is much higher (~6% I think) because it is so targeted and is really administered by 50 different agencies on top of the feds.

And because, while Medicare is usually a primary payer, Medicaid is the payer of last resort, so Medicaid has a lot more expense in verifying that there isn't another payer with an obligation to pay (including Medicare -- there is a substantial population eligible for both programs) that should pay before Medicaid, or reimburse Medicaid.

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