UBI 2021

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I Shrugged
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UBI 2021

Post by I Shrugged » Thu May 20, 2021 7:18 am

Forking off the thread from the Gold folder....
D1984 wrote:
Tue May 18, 2021 10:42 pm
I Shrugged wrote:
Tue May 18, 2021 2:20 pm
dockinGA wrote:
Tue May 18, 2021 11:57 am
I Shrugged wrote:
Tue May 18, 2021 9:21 am
MMT and UBI will be a colossal failure for other reasons, and will hasten the downfall of a country.
I'm curious to learn a little more about why you feel UBI will be a colossal failure. I'm inclined to agree with you, but I'm also of the opinion that it's not the dumbest idea I've ever heard bandied about, and sure beats the pants off of our current welfare system. And I'm also inclined to think that continued wealth disparities driven by things like ZIRP will end badly (some type of revolution followed by a dictatorship), and maybe UBI in some way could help alleviate that.

I suppose a careful parsing of my statements might lead one to believe that I think UBI will be a colossal failure, but any other approaches will be a colossal failure as well so we might as well give it a shot.
Just look at all the employers saying they can't find anyone because people are being paid enough to stay home.
When payments reach a comfortable level, people will just become bums. It will be like Brave New World, but money will be soma (the drug).
But that is exactly the difference in UBI vs unemployment insurance (or for that matter vs welfare/TANF) and it's night and day: UBI pays you no matter what; if you get a job you will still be better off because then you will be getting a paycheck plus your UBI check. Unemployment explicitly stops paying you once you get a job; if you see a place hiring and want to try working there but it actually pays less (or at least less after subtracting FICA taxes) than you'd make on your current unemployment then you are essentially facing a 100%+ marginal tax rate in order to take the job. Under that circumstance I can't blame anyone for not wanting to take said job!

UBI advocate Scott Santens said it far better than I could: Unemployment (or welfare) pays you to do nothing; UBI pays you to do anything. With UBI you're always better off financially if you do work....it just provides a floor no one can fall beneath if for some reason they can't find a job.
I have argument against UBI no matter what, but first it would be important to know how it is to be financed. What does Mr. Santens advocate to pay for UBI?:
1) Money printing / MMT, or
2) Borrowing / Bond issuance, or
3) Taxes on businesses and higher wealth individuals?
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Re: UBI 2021

Post by jalanlong » Thu May 20, 2021 7:47 am

I Shrugged wrote:
Thu May 20, 2021 7:18 am
Forking off the thread from the Gold folder....
D1984 wrote:
Tue May 18, 2021 10:42 pm
I Shrugged wrote:
Tue May 18, 2021 2:20 pm
dockinGA wrote:
Tue May 18, 2021 11:57 am
I Shrugged wrote:
Tue May 18, 2021 9:21 am
MMT and UBI will be a colossal failure for other reasons, and will hasten the downfall of a country.
I'm curious to learn a little more about why you feel UBI will be a colossal failure. I'm inclined to agree with you, but I'm also of the opinion that it's not the dumbest idea I've ever heard bandied about, and sure beats the pants off of our current welfare system. And I'm also inclined to think that continued wealth disparities driven by things like ZIRP will end badly (some type of revolution followed by a dictatorship), and maybe UBI in some way could help alleviate that.

I suppose a careful parsing of my statements might lead one to believe that I think UBI will be a colossal failure, but any other approaches will be a colossal failure as well so we might as well give it a shot.
Just look at all the employers saying they can't find anyone because people are being paid enough to stay home.
When payments reach a comfortable level, people will just become bums. It will be like Brave New World, but money will be soma (the drug).
But that is exactly the difference in UBI vs unemployment insurance (or for that matter vs welfare/TANF) and it's night and day: UBI pays you no matter what; if you get a job you will still be better off because then you will be getting a paycheck plus your UBI check. Unemployment explicitly stops paying you once you get a job; if you see a place hiring and want to try working there but it actually pays less (or at least less after subtracting FICA taxes) than you'd make on your current unemployment then you are essentially facing a 100%+ marginal tax rate in order to take the job. Under that circumstance I can't blame anyone for not wanting to take said job!

UBI advocate Scott Santens said it far better than I could: Unemployment (or welfare) pays you to do nothing; UBI pays you to do anything. With UBI you're always better off financially if you do work....it just provides a floor no one can fall beneath if for some reason they can't find a job.
I have argument against UBI no matter what, but first it would be important to know how it is to be financed. What does Mr. Santens advocate to pay for UBI?:
1) Money printing / MMT, or
2) Borrowing / Bond issuance, or
3) Taxes on businesses and higher wealth individuals?
I have not studied UBI in depth, but for people who support it, how do they believe that anyone would ever work at a McDonalds or unloading trucks at Wal Mart if those people could get the same pay for just existing? I guess their response might be that employers would have to raise pay to make those jobs appealing but I would think if people can get their basic needs met with a monthly UBI check, there is no way they are going to unpack boxes at WalMart no matter what the pay. It wouldnt take long to come up with a long list of jobs nobody would ever do if their basic needs were met with a government check.
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Re: UBI 2021

Post by Xan » Thu May 20, 2021 9:16 am

jalanlong wrote:
Thu May 20, 2021 7:47 am
I have not studied UBI in depth, but for people who support it, how do they believe that anyone would ever work at a McDonalds or unloading trucks at Wal Mart if those people could get the same pay for just existing? I guess their response might be that employers would have to raise pay to make those jobs appealing but I would think if people can get their basic needs met with a monthly UBI check, there is no way they are going to unpack boxes at WalMart no matter what the pay. It wouldnt take long to come up with a long list of jobs nobody would ever do if their basic needs were met with a government check.
It's at least a massive improvement over giving people benefits only when they're not working. If they get their basics covered without working at all, and then have the choice to start working and end up in the same place financially, then they'll never work. With UBI, they can end up twice as well off by both working and collecting.
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Re: UBI 2021

Post by WiseOne » Thu May 20, 2021 9:28 am

Weighing in favor of UBI here!

We already knew before the current unemployment benefit debacle that paying people on condition that they not work will indeed lead to their not working. Medicaid benefits have exactly that effect. I've spoken with many patients with chronic conditions who rely on Medicare and want to work, but have to be careful to limit their on-paper income to the $500/month limit required to qualify for Medicaid. Some of them work under the table to get around this problem, but the last thing they can afford to do is get a job that doesn't include health care benefits. So my sense is that by default, people really do want to work as long as there is no disincentive to do so. UBI wouldn't necessarily be a disincentive as long as it's implemented correctly, i.e. you don't lose one cent of it if you get a job.

Of course this would have to be tested. I'm sure some people will opt to not work - but I bet those are exactly the people who would take a job and do as little as possible once they have it. They're no big loss.

Big advantage of UBI, it would replace all state and federal welfare systems including (eventually) Social Security. That would save enough money that it might not be as painful as you think to fund it via taxes. A UBI payroll tax, replacing the Social Security payroll tax, for example. The machinery of the SSA could be used to administer UBI, so that's practically zero extra admin cost.
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Re: UBI 2021

Post by pp4me » Thu May 20, 2021 9:37 am

I think it's a non-starter as long as we're going to continue not enforcing immigration laws.

Sooner or later we would have to address the issue of whether the UBI payments are going to paid to the illegal immigrants who are already here. Deny it and you will still have a substantial number of people living in poverty among us. Allow it and you will have an endless supply of illegal immigrants coming to share the wealth of the U.S.A. which apparently has no limits any more.
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Re: UBI 2021

Post by WiseOne » Thu May 20, 2021 9:42 am

pp4me wrote:
Thu May 20, 2021 9:37 am
I think it's a non-starter as long as we're going to continue not enforcing immigration laws.
Add "allowing birthright citizenship" to that qualifier. Yes, I forgot about that - I'd mentioned that in prior UBI threads, as something that has to get fixed before UBI is a real possibility. Otherwise we might as well just write monthly checks to the entire population of the Americas south of Texas.
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Re: UBI 2021

Post by barrett » Thu May 20, 2021 9:44 am

Haven't studied this issue either, but wouldn't a monthly check to every person in the country mean that almost all goods & services would end up costing more? A monthly check in the amount of $1,000 to 330,000,000 people is an extra four trillion dollars being pumped into the economy each year. It seems that UBI would incentivize too many negative behaviors like families having more kids just to collect more monthly checks. Or might that eventually lead to more favorable demographics?

Has anyone heard the issue of taxation discussed with UBI? Might it be like SS payments where a certain percentage is taxable?

I see other posts coming in. Sorry if I am doubling up on something.
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Re: UBI 2021

Post by pp4me » Thu May 20, 2021 10:17 am

Also, if the UBI payments are based on family size, how would it differ from the current welfare system that encourages recipients to have more children?

And besides the illegal immigrant issue it seems to me a big beneficiary of UBI would be illegal drug dealers.
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Re: UBI 2021

Post by barrett » Thu May 20, 2021 10:28 am

pp4me wrote:
Thu May 20, 2021 10:17 am
And besides the illegal immigrant issue it seems to me a big beneficiary of UBI would be illegal drug dealers.
I'm not following you here. Why would drug dealers benefit (apart from the possibility that they too might be getting UBI payments? O0 )
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Re: UBI 2021

Post by Xan » Thu May 20, 2021 10:32 am

barrett wrote:
Thu May 20, 2021 10:28 am
pp4me wrote:
Thu May 20, 2021 10:17 am
And besides the illegal immigrant issue it seems to me a big beneficiary of UBI would be illegal drug dealers.
I'm not following you here. Why would drug dealers benefit (apart from the possibility that they too might be getting UBI payments? O0 )
I believe the implication is that people will use their UBIs to buy drugs.
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Re: UBI 2021

Post by pp4me » Thu May 20, 2021 11:32 am

barrett wrote:
Thu May 20, 2021 10:28 am
pp4me wrote:
Thu May 20, 2021 10:17 am
And besides the illegal immigrant issue it seems to me a big beneficiary of UBI would be illegal drug dealers.
I'm not following you here. Why would drug dealers benefit (apart from the possibility that they too might be getting UBI payments? O0 )
More money to spend on illegal drugs by the people most likely to use illegal drugs. The government would be, in effect, subsidizing their behavior.

If you think UBI would lessen the problem then we obviously have different views of human nature.
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Re: UBI 2021

Post by barrett » Thu May 20, 2021 11:36 am

Xan wrote:
Thu May 20, 2021 10:32 am
barrett wrote:
Thu May 20, 2021 10:28 am
pp4me wrote:
Thu May 20, 2021 10:17 am
And besides the illegal immigrant issue it seems to me a big beneficiary of UBI would be illegal drug dealers.
I'm not following you here. Why would drug dealers benefit (apart from the possibility that they too might be getting UBI payments? O0 )
I believe the implication is that people will use their UBIs to buy drugs.
Well, I had thought of that but I don't think it necessarily follows. I have a feeling that most on this forum would just buy gold or equities! Universal Basic Dollar Cost Averaging Plan.
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Re: UBI 2021

Post by pp4me » Thu May 20, 2021 12:43 pm

Before rolling the whole thing out it would be nice if we could take one state and run a long-term experiment. California would be the obvious choice but I suspect voters in Oregon and Washington might also be willing to volunteer.

My prediction would be that the chosen state will increase in population but the incoming population will be mostly unskilled, no-skilled, or otherwise unemployable people. That prediction is based on the current situation at the border and the chosen state would therefor be a perfect microcosm for what would happen nationally (and like I said California is the perfect candidate since it's already going in that direction and has been for a long time).

I would also predict that the homeless population will increase and that crime and drug usage will also increase.

I could be proven wrong, but like I said, I'm all in favor of this type of experimentation to test what to me are whacky ideas.

Unfortunately, that's not the way we do things.
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Re: UBI 2021

Post by I Shrugged » Thu May 20, 2021 4:22 pm

barrett wrote:
Thu May 20, 2021 9:44 am
Haven't studied this issue either, but wouldn't a monthly check to every person in the country mean that almost all goods & services would end up costing more? A monthly check in the amount of $1,000 to 330,000,000 people is an extra four trillion dollars being pumped into the economy each year. It seems that UBI would incentivize too many negative behaviors like families having more kids just to collect more monthly checks. Or might that eventually lead to more favorable demographics?


It will be important to get an answer to how it would be funded. If it’s MMT / money printing, then yes it will be inflationary.
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Re: UBI 2021

Post by I Shrugged » Thu May 20, 2021 4:38 pm

WiseOne wrote:
Thu May 20, 2021 9:28 am
Weighing in favor of UBI here!

We already knew before the current unemployment benefit debacle that paying people on condition that they not work will indeed lead to their not working. Medicaid benefits have exactly that effect. I've spoken with many patients with chronic conditions who rely on Medicare and want to work, but have to be careful to limit their on-paper income to the $500/month limit required to qualify for Medicaid. Some of them work under the table to get around this problem, but the last thing they can afford to do is get a job that doesn't include health care benefits. So my sense is that by default, people really do want to work as long as there is no disincentive to do so. UBI wouldn't necessarily be a disincentive as long as it's implemented correctly, i.e. you don't lose one cent of it if you get a job.

Of course this would have to be tested. I'm sure some people will opt to not work - but I bet those are exactly the people who would take a job and do as little as possible once they have it. They're no big loss.

Big advantage of UBI, it would replace all state and federal welfare systems including (eventually) Social Security. That would save enough money that it might not be as painful as you think to fund it via taxes. A UBI payroll tax, replacing the Social Security payroll tax, for example. The machinery of the SSA could be used to administer UBI, so that's practically zero extra admin cost.
None of the government agencies are going to give up their turf. The recipients will do the most suboptimal of whatever possibilities there are. This will work like “tax reform” works.
Last edited by I Shrugged on Thu May 20, 2021 8:52 pm, edited 1 time in total.
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Re: UBI 2021

Post by jalanlong » Thu May 20, 2021 5:14 pm

WiseOne wrote:
Thu May 20, 2021 9:28 am
Weighing in favor of UBI here!

We already knew before the current unemployment benefit debacle that paying people on condition that they not work will indeed lead to their not working. Medicaid benefits have exactly that effect. I've spoken with many patients with chronic conditions who rely on Medicare and want to work, but have to be careful to limit their on-paper income to the $500/month limit required to qualify for Medicaid. Some of them work under the table to get around this problem, but the last thing they can afford to do is get a job that doesn't include health care benefits. So my sense is that by default, people really do want to work as long as there is no disincentive to do so. UBI wouldn't necessarily be a disincentive as long as it's implemented correctly, i.e. you don't lose one cent of it if you get a job.

Of course this would have to be tested. I'm sure some people will opt to not work - but I bet those are exactly the people who would take a job and do as little as possible once they have it. They're no big loss.

Big advantage of UBI, it would replace all state and federal welfare systems including (eventually) Social Security. That would save enough money that it might not be as painful as you think to fund it via taxes. A UBI payroll tax, replacing the Social Security payroll tax, for example. The machinery of the SSA could be used to administer UBI, so that's practically zero extra admin cost.
I would probably rather have something as "simple" as UBI instead of a myriad of government programs and agencies giving out money for specific purposes which ends up causing malinvestment. Unemployment, food stamps, disability payments, housing vouchers etc. Every one of the more than 126 federal welfare programs comes with its own bureaucracy, its own set of arcane rules, regulations, and restrictions, and its own significant (and rising) overhead costs. A UBI should require significantly less in terms of administrative expenses. A program in which everyone gets a check for the same amount is simple enough to be administered by a computer program.

But I can't see that happening if only for the reason that politicians need things to promise in exchange for votes. If everyone got a monthly stipend from the government for X amount of $$ and government welfare programs went away, there would be no way for politicians to buy votes with new programs. So eventually programs would just be added on top of the UBI. Or the new system would start to be means tested which might again incentivize not working etc.
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