So instead of having an incentive to raise their prices, producers will have more of an incentive to produce more. And as long as you're not coming up against resource limits, prices will stay low. If producers tried to raise their prices, they'd lose customers.
Does that make sense?
My take on UBI is that it only makes sense as a response to rampant automation that has marginalized a substantial (perhaps >75%) portion of the global human population. Meaning that most people cannot effectively enter the economy and provide for themselves because they just cannot compete against the machines, at some point in the near-future.
In the limit, nanotech and fusion power will put almost all of us out of work (not to mention AI/ML et. al.)
At that point, we have to figure out what to do with all these "surplus" people. The (gruesome) options are: enslave them (N. Korea), or kill them.
One maybe-possible other solution is to just give them money and see what they do.
From my POV any discussion of UBI as something other than a response to a "phase shift" in economic realities due to advancing automation is kind of missing the point.
I actually would like to create a Universal Automation Inc. company and issue shares and get crackin', but I'm lazy and it seems to be happening anyway!
https://www.thenation.com/article/job-guarantee-government-p...
The summary is: everyone who is willing and able to work should get a standard salary and benefits from the Federal Government. We could have a decentralized system for setting up/vetting/approving JG/ELR projects all across the country, but the Federal Government would pay JG/ELR participants directly. This could include all kinds of things, like Y Combinator.
As for profit-sharing "United States, Inc" as Sam Altman proposes, we can do that too. We can set up a government program that says publicly traded companies in the USA will get a tax incentive if they promise to pay at least Y% of income in dividends. The government can take a small stake in these companies, and distribute the dividends equally to all citizens. It can try to track a broad stock-market index in its portfolio to make sure the investment passive (we don't want the government actively investing in companies, it shouldn't be picking winners and losers). Also, with a low-risk portfolio, the program would hopefully stay solvent, leaving the option of liquidating assets should we ever want to unwind this (for either political or economic reasons).
Where do we get the money to do all this? Governments don't need to finance spending when they have sovereign control of their own currency. https://en.wikipedia.org/wiki/Modern_Monetary_Theory
If by "discourages" you actually mean negative incentive to work, that would be awful.
But I suspect you mean it lowers the incentive to work. And that's not necessarily a bad thing.
Productivity per hour keeps increasing. It's okay to let the average workweek get smaller. Minimum wage government labor is likely not the best use of a lot of people's time.
If UBI reduced minimum wages (say by $1/hr. for each $2000/yr. of UBI, from a pre-UBI target level that increases with inflation) and is not available to immigrants other than permanent residents, it might reduce immigration demand in categories that require a period of non-LPR status (and particularly attractiveness of resort to illegal immigration) by reducing both wages (but not total income, for citizens and LPRs) for unskilled workers directly in both open employment and, by indirect pressure, under-the-table employment.
https://news.ycombinator.com/item?id=15789108
My comment on a basic flaw in the underlying analogy (that nothing like "shares in the US" corresponds to a share of GDP) is here:
Out of curiosity don't we already do this? We have public/section 8 housing, food stamps, medical/dental, etc... If we are talking about handing out cold hard cash as basic income, as the statement implies, then that is a recipe for disaster. There would be no guarantee that people would use that money for basics like housing and food.
If Elon Musk ran YC, he'd raise billions and fund thousands, and then use that success to fund tens of thousands, and then ...
IMHO the key is not to give people money, but to reduce the cost of their existence. Get rid of the mortgage deduction. Reduce or eliminate property taxes on homes. Heck, put a cap on what percentage of a home price can be borrowed.
I agree that unlocking many peoples potential may require freeing them financially, but I don't agree that you do it by handing out money.
While I'm ranting, I'd expect someone in tech to be able to model or simulate a hundred million person economy and figure out how to get desired outcomes rather than jump on some popular untested idea like BI. Kudos for trying to test it though, but it's not a real test unless it's economy-wide (rents won't really increase if 0.1 percent of the people get free money).
Take a country, US for example. Let's say that society determines that a reasonable UBI is $1000/month (ignore the number, this is about the process, not the amount).
When I say "everyone", I mean "every US resident who has been a US citizen for at least X years".
- Year 1: everyone begins receiving $10/month, conditioned to willing to have employment and spending tracked by researchers. Everyone who receives a payout and also receives social support funds, sees the social support funds reduced by $10 per month.
- Year 5: if researches see no significant negative results and the economy continues to grow, etc. the payout is increased to $50/month. Otherwise, if there are significantly negative outcomes, the payout is eliminated.
- Year 10: repeat, payout increased to $100/month.
- Year 15: repeat, payout increased to $200/month.
- Year 20: repeat, payout increased to $500/month.
- Year 25: repeat, payout increased to $750/month.
- Year 30: repeat, payout increased to $1000/month. All other social payouts are ended.
I've tried and failed to figure out a less confrontational-sounding way to ask this, but do you have any data to back this claim up, or do you just not trust the poor?
Its not a matter of trust, its a matter of likely occurrence. In the event that someone uses their UBI on something non-essential like gambling/drugs instead of paying their rent. What do we do as a society? My solution is pay for the essentials like food, housing, medical, etc directly instead of handing out cash. This eliminates that possibility.
Why would you want such a guarantee? You don't think people who need housing and food will buy housing and food with their money? I mentioned this in another comment, but I'm not aware of any kind of epidemic of people who can afford housing not buying housing.
If we do have such a problem, then I agree with you that we should help the people who are suffering from bad judgment. But why not do that in addition to providing them with a basic income?
A lot of positive externalities that UBI will bring simply won't kick in at low payout levels, whereas the negatives which will be brought in by diversion of funds will be apparent.
The externalities I am talking about are of this form: -Increased benefits to public health as people are less stressed about losing jobs -Increased entrepreneurship and all the benefits that come from it -Increased cultural output and the increased geopolitical influence
The whole point of UBI is that's it's not another handout.
It's giving everyone an option to not have to work a day job to survive (something that moderately well-off people, or people with upper-middle-class parents already have).
The impact of "what if most of the citizens didn't have to work to survive" can't be estimated with a small hand-out, because it will not achieve that.
In other words, UBI is somewhat binary in nature: either you have it, or you don't. It doesn't scale down beyond a certain point.
Then we're better off without it. It would be completely naive to try to roll it out in full scale without knowing the potential impact. Not worth taking the risk.
However, I would question a couple parts:
> every US resident who has been a US citizen for at least X years
Why limit it in this way?
> conditioned to willing to have employment
Why? Isn't one of the biggest benefits of basic income that it gives more people more of an option not to work?
And what does "willing to have employment" mean? Every man has his price. If you pay people enough, they will work, no?
X can be 0. I didn't set it to any specific number to avoid discussing it (some people would want a cool-down period, others don't).
> conditioned to willing to have employment
Why?
"willing to have (employment and spending) tracked by researchers" :)
Yes. And that's a very good point. For example, we might have the resources to feed the world, but we don't have the resources to feed the world meat 24/7. The price of meat would increase, so people would substitute other forms of food.
> Like rent or health care? People could move out of the cities to avoid the rent increases, but then cost of services / taxes per person rise in those areas.
Basic income allows people to move out of the cities because "proximity to jobs" is less of an incentive for them to live there. This causes the real estate prices in expensive cities like New York and San Francisco to drop as other areas become more desirable to live in.
People wouldn't be moving out of the cities to avoid rent increases. They'd be moving out of the cities because it becomes more affordable to live outside of the cities. That, in turn, would cause rent prices in the cities to decrease.
Health care prices are an issue that basic income doesn't solve. We need to address them regardless of whether we have a basic income.
These new UBI based communities won't be able to provide the same economic/educational opportunities or efficiency of services that the cities can.
Depends on what you mean. A couple questions:
1. Is it a problem for people not to be employed?
2. How do we define employment? Does the pay have to be above a minimum wage? Does it have to be full time? Does volunteer work count? Etc.
We presumably all want people to find interesting and fulfilling ways to spend their time. Basic income gives people the freedom to spend their time in a meaningful way. But it doesn't directly provide meaningful activities to people.
If, after implementing a basic income, we discover that everybody's bored, then I agree with you that this a problem that we'll have to address.
But we should keep in mind that many people are miserable in their jobs already. I have a feeling that people will find interesting ways to spend their time on their own, but if they don't, it's not the end of the world. Freeing people from jobs doesn't automatically make them happy, but it's a first step.
> These new UBI based communities won't be able to provide the same economic/educational opportunities or efficiency of services that the cities can.
I don't know what you mean by UBI-based communities. It's not that the world will be segregated into UBI-based communities and non-UBI-based communities. It's all a continuum. As in today's world, there will be a continuum of people at different income levels. UBI just puts a floor on income.
As is the case today, some cities will be more desirable to live in than others. Maybe those cities have better economic/educational opportunities, as you say. But that's true already today. And because basic income will make it more affordable to live in those cities, it increases everyone's opportunity across the board.
As far as educational opportunities go though, if everyone has the freedom to spend their time how they choose, there are plenty of educational resources available out there for anyone, no matter where you live. I wrote a blog post about this a while ago:
http://www.suncho.com/blog/20140219_too_cool_for_school.html
If one's idea of human society is people working to earn money. Fullstop. And those who are better at it are the be all and end alls of human civilization and progress and the ultimate aspiration. Then words like lazy, people will not do anything, arguments that are generic enough to block any action, and are actually red herrings enter the debate.
This seems to be a pretty impoverished view of humanity. But one that our current capitalist system necessitates,
The other way is thinking of the billions of brains wasted every generation just trying to survive, exactly what humans did 2000 years ago. Now imagine if all these brains could be freed and god knows how much innovation, progress and intellectual output can be unlocked into a completely different kind of society. That's a vision.
But the reality is many will stick doggedly to the personal wealth and achievement mantra and because of the disproportionate influence of wealth and entrenched interests in our societies right from feudalism to now, and UBI or any such fanciful idea will be sabotaged and blocked.
It's not so cut and dry. I don't believe that incentives under UBI will lead to greater innovation. I see it as wonderful gift to the most intelligent and self motivated, while killing the incentives to achieve anything for so many others.
I grew up in a poor rural area and have seen many examples of what guaranteed monthly checks does to ambition. I believe kids growing up in the inevitable "UBI communities" will be trapped even more strongly than in disadvantaged communities now.
My objection is not about taxes or wealth distribution, but the ethics of giving millions such a choice, much less making it the "default" one.
Do you think it's a coincidence that that check is only guaranteed in the absence of ambition? You've seen the perverse incentives of means-tested welfare, not the effects of a UBI.
1 - These weren't the people who were going to move our economy and society forward in the first place.
2 - It's better if they sit on the couch and have their needs met than having them turn to violence or fueling the rise of the next Hitler. That's what will happen if we take away a huge number of people's jobs via automation and give them nothing to fill the gap.
The people who were going to move our economy and society forward are not the motivated ones. A fire needs to be lit under their asses. What else are they entitled to for _no_ effort?
If they weren't going to benefit our society at all and might be a detriment, a round of ammunition costs far less than UBI.
This may sound cynical, but those who can actually deliver innovation, progress and intellectual output of a meaningful magnitude are already doing pretty well. To a big extent, because they can be determined and can work hard. Most people (myself included) are rather mediocre and have no capacity to advance the society beyond its current, rather advanced state.
The power of UBI is that it solves the immediate problem that many jobs will disappear, and with modern technology people shouldn't be starving. But it keeps the tried and tested incentive-based capitalism underneath.
Perhaps one day mankind will evolve to a utopian state, but in the intermediate to long term we absolutely are still capable of great selfishness, laziness, and ready to take any shortcut to advance our own goals.
The Grateful Dead were local musicians who gained more widespread popularity whether every one of them wanted it or not, especially once they signed a record deal with a capitalist outfit that could advertise and promote in ways that the musicians could not or would not do on their own.
As the purported leader of the band, Jerry Garcia for one indicated that he was soon earning more income than he really needed, and having a strong balance toward benevolence over greed, set out to give 1000 dollars each to numerous individuals who without a doubt were truly in need of the funds.
A thousand dollars really would go a lot further then compared to a short 10 years later once the devastating devaluation of the US dollar was set into motion after it was unlinked to a universally appreciated natural resource (gold).
Anyway, turns out that before too long it was determined that it was costing twelve hundred dollars to give away each thousand, and the program ended up grinding to a halt.
Many of the human-made constructs in our world were defined as a stop-gap for the lowest depths of humanity. Certain people are extremely selfish, narcissistic, care only for themselves? We have some laws to combat that such as taxes, environmental protections, etc. Certain people are violent? We have some laws to combat that and gone to war against that.
So you need to ask yourself, do you have faith that UBI will "free brains enough to produce innovation, progress, and further intellectual output", or lead to massive work reduction, increased prices, and increased complacency?
You don't need to know that yet. As long as you accept that work for the sake of work is not the purpose of life, you can study UBI to see how people behave.
1) What would stop us from recreating the inefficient welfare state that already exists on top of this new one when some people inevitably blow their UBI on drugs/cheetos/whatever and don't have money for rent? It seems that for this to work we'd have to maintain some intestinal fortitude to say "no" - and that to me sounds like a serious culture change in this country...which gets me to my next, perhaps more contentious, point.
2) What role do immigrants play in this? Google's telling me there's 11m illegal immigrants in the US right now (though I've seen higher estimates from more hawkish folks). What about people on a visa who pay taxes? Would they both get UBI from Uncle Sam? My view for both would be no, but some of my peers who support UBI have argued that they should, pretty emphatically.
I guess what I'm saying is that I'm detecting, at least in my circles, a lot of overlap between people who believe in the "global citizen" model and those who support this. Perhaps Altman's idea of basically just issuing shares of USG is meant to get around this, but that sounds still half-baked at this point, even if it is just a branding strategy. This, at its heart, is more of a rights question and I don't think we've been thinking about it that way.
Basically strive to enable Amish style living but instead of trying to maintain an complete early 19th way of life, include elements which are near free due to automated manufacturing.
You supply the land (lot in an exurban area near a major metro with a temperate climate) and labor and the rest is available at a minimal recurring cost. 1.) Housing - Permit ready Ikea like house with mail order pre-cut 2x4 and panels 2.) Energy - Solar charged battery/heating/cooling 3.) Transportation - 4 wheeled e-mountain bike 4.) Clothing - Target/Walmart 5.) Food - Self grown heirloom tomatoes, quinoa with store bought supplements such as cheap corn, meats, etc. 6.) Telecom - Long Range Wifi Receiver or Internet Cafe 7.) Education - Khan Academy, home schooling 8.) Entertainment - Youtube by DVD
The first two minutes of this video are pretty interesting/inspiring (not that I'm ready to drop everything to start a farm or anything...yet):
Urban Farmer Curtis Stone https://www.youtube.com/watch?v=XHls2HEFudw
TLDR - Farming can teach you a lot about yourself.
It was an honest attempt at economic reform by a few forward thinking leaders. Within a generation the movement was captured by politicians who used its popularity to further their ambitions. The fight against opponents self-perpetuated and wins became more important than change. The program morphed to the infamous bread and circuses, subsidizing a city of a million people that ultimately collapsed.
I will aplaud the reformers but some things never change.
Last I checked, welfare does the opposite of this. It helps people merely subsist, not strive for greatness.
Then he goes on to compare YC to basic income. Seriously? They take a share in your company and help you develop it. That isn't money for nothing.
If he weren't a millionaire and the current president of YC, would we keep seeing articles about his vision on the front page of HN? I don't think so. I don't believe his arguments are that cogent or compelling.
I find it increasingly sad and frustrating to see yet another Sam Altman on UBI piece here. The mantra on HN is that ideas matter and that HN wants to deemphasize names and avoid promoting pieces being posted merely because they are about some celebrity. I think these articles fail that test.
If you take Sam Altman out of this article, would we discuss it at all? If the answer to that is no, then why are we discussing it?
How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.
To be fair, he does describe what he's attempting as an "experiment" and acknowledges that it might not work out the way he thinks.
These two things aren't even close to the same thing. If Y Combinator accepted every single applicant, than yes, it would be equivalent to UBI. They obviously do not.
Tell that to Sam, not me. He made the analogy.
What happens to the people who blow their UBI on drugs/gambling etc instead of healthcare and prosperity. Who will pay to re-fund them? (and fund them again?)
But who worries about this, or would consider cutting social security due to drinking or gambling?
https://www.brookings.edu/research/the-typical-household-wit...
"The average balance of outstanding student loan debt for households with some debt was $25,700. The median debt was $13,000, and seventy-five percent of borrowers had less than $29,000. These burdens are relatively modest given the annual earnings of these households. The average annual wage earnings among this population was $71,700."
Note: "for households with some debt".
The butcher's motives are complex, but one motive is that his work is also for the sake of supporting himself and his family. His relationship with his family, his wife, his kids, is also complex, but part of it is the (at least partial) reliance on their husband and father in an economic sense.
What does UBI do to the butcher and his relationship to his family and to his community?
I don't know, I'm sure there would be some decrease in economic activity from life changes by people who hate their jobs and have reluctant relationships held together by financial dependencies. But these would be probably be more than compensated by the productive impacts on people's lives.
> "But in countless ways it’s much harder to convince lawmakers and politicians to give every person in the country cash gratis than it is to guide a start-up to a nine-figure valuation."
You don't have to convince lawmakers to do it. It's possible to implement basic income without any direct government support.
> "The question I’m interested in: How do we unlock maximum human potential?"
This is almost the right question, but not exactly. The right question is "how do we unlock the economy's prosperity-maximizing capacity?" It's not about how how we get the most out of humans. It's about how we provide the most for humans.
> "Obviously, there are a lot of people who could do great things that would benefit all of us. Create art, start companies and yet they can’t."
This is true, but human labor is just one of many resources that we're not using to their full potential. By narrowly framing things just in terms of what we can get out of humans, we're limiting the possibilities of basic income.
> "One of the things that people forget is that if the robots really do come, yes, they will eliminate or change a lot of jobs, but the cost of goods and services will just go down and down and down."
Sort of. Monetary policy will prevent deflation. So the price of the things people need to buy will always remain stable. It's just that people might get more stuff for free.
> "What I would propose is a model like a company where you get a share in U.S. Inc. And then, instead of getting a fixed fee, you get a percentage of the GDP every year."
This is a mistake. The economy has the capacity to produce a certain amount of wealth for people. That amount is difficult to calculate ahead of time. Measures like GDP are probably not going to help. But the appropriate amount of basic income is always going to correspond to the amount of spending that the economy can productively respond to.
Governments can often be trusted to maintain a stable value of currency. That's why fiat currency out-competed gold and why Bitcoin will never be able to compete with a well-managed fiat currency.
> we should introduce a system which makes our livelihoods dependent on the whims of bureaucrats.
There are robust ways to implement basic income that don't depend on "the whims of bureaucrats."
I think you meant to post this in 2011
The trend seems to go the other way though: taxes for upper incomes are being lowered, no estate tax and Obamacare is pretty much neglected until it falls apart. I think instead of UBI he should worry more about near term issues.
Regarding the UBI personally I think if someone manages to make it work without the government I am all for it.
It's a hard problem in some ways similar to a working decentralized currency that seemed impossible and took forever to crack, maybe even cryptocurrencies/blockchain technologies are part of an elegant solution to this UBI implementation problem, maybe a Startup can make it work.
Right now, yes, that's definitely the case. But does it have to be? Our campaign finance system provides a direct and unlimited conduit between wealth and political power, but we can change that.
What particularly strikes me is how he points out that this already exists in cultures. Even in villages in India, you'd find people simply willing to do stuff for each other. If you have a wedding in your family, the village will come together to cook and serve meals, offer hospitality to your guests and generally work to make everyone happy on the occasion. If you happen to be mentally ill, someone would still feed and clothe you, include you at least in some small way in their social life, and so on. You won't be abandoned.
UBI looks like a quantified version of this social capital. If we resist and think "why should someone else do nothing and get the benefits of my work?", the society has lost the practical generosities of village life and UBI might be a way to resurrect that. I personally find it pretty ridiculous that there are homeless and hungry people at all in the wealthiest of countries, and am certainly curious about what potentials UBI could unlock for them given they haven't yet fallen into antisocial ways despite their condition. Something is wrong if you see an old man in rags rummaging through a trash can for food scraps in a high GDP country.
Ridiculous.
Another counter point is that doing this at scale would have huge impact on pricing of services. A lot of people do monotonous boring repetitive work they absolutely hate even if it generates bare bone income. This can include everything from janitorial services to cashier at grocery store to construction sites. Once you get same amount of money for free, there is less incentive for anyone to do this sort of work. Consequently supply for workers would reduce while demand stays same. This would inflate prices of goods and services in general economy. My hunch is that price increase would be exactly such that to offset the basic income. So the net effect would be having no basic income at all. In countries like Finland things are different because of their sovereign funds, tax structure and external income sources.
Yes, the UBI will free the labor market to be an actual free market in which services are priced fairly. If you need a janitor, you will have to provide pay that the janitor is willing to work for, even if not threatened by starvation or homelessness.
First, you need to see it as a part of the existing system: healthcare, education, law enforcement, prisons, etc.
- A hospital cannot deny care to a patient in an emergency situation. Many medical emergencies occur due to poor living conditions. If you give money to people, their living conditions improve, improving their health and reducing their chances of getting in a medical emergency situation.
- Law enforcement spends a lot of resources and time handling crime. Given money to people is a deterrent for crime.
- Did you know that having a person in prison is more expensive than having them on a hotel? Since giving money to people deters crime, it also prevents them going to prison.
So, in this respect, just by having people do absolutely nothing, you can end up saving money. This is unintuitive.
Now, universal basic income can be bad in some cases. Many people in the economy do whatever it takes to have an income, however low. They will risk their lives, their health, do things they don't want to do. Universal basic income gives people an option to not engage in those activities.
UBI feels like a tactic with too many complications and opportunities to distort incentives, motivations, etc.
It feels like this statement is what would concern most skeptics of UBI, that is yet another layer of complexity on top of an already complex system.
Isn't the main benefit of UBI to make it so everything is streamlined into a single program and administrative overhead is reduced?
Also it's not the main benefit of UBI. It's just one benefit (or side effect) of UBI - when it's universal (not just a pilot) you can reduce the overhead of administrative costs.
No, the main benefit is that eliminating means testing eliminates perverse effects which reduce the benefit of outside income when in means-tested benefit programs.
Reduced total program overhead is a peripheral benefit of a mature UBI vs. existing means-tested benefit programs.
Um, no need, it's in my comments but not in this message list any more, not necessary to use what's left of my feeble memory, I'll just copy & paste it back in :)
Without the leading dollar sign for one of my run-on sentences, replaced by USD instead, just like you would do on a teletype machine.
Quoting myself here:
>It is easy for some of us to remember what it was like back in the '60's when SF rose to become the US center of non-capitalism at the time.
>The Grateful Dead were local musicians who gained more widespread popularity whether every one of them wanted it or not, especially once they got a record deal with a capitalist outfit that could advertise and promote in ways that the musicians could not or would not do on their own.
>As the purported "leader" of the band, Jerry Garcia for one indicated that he was soon earning more income than he really needed, and having a strong balance toward benevolence over greed, set out to give 1000USD each to numerous individuals who without a doubt were truly in need of the funds.
>1000USD really would go a lot further then compared to a short 10 years later once the devastating devaluation of the US dollar was set into motion after it was unlinked to a universally appreciated natural resource (gold).
>Anyway, turns out that before too long it was determined that it was costing 1200usd to give away each 1000USD, and the program ended up grinding to a halt.
The Grateful Dead were local musicians who gained more widespread popularity whether every one of them wanted it or not, especially once they got a record deal with a capitalist outfit that could advertise and promote in ways that the musicians could not or would not do on their own.
As the purported "leader" of the band, Jerry Garcia for one indicated that he was soon earning more income than he really needed, and having a strong balance toward benevolence over greed, set out to give $1000 each to numerous individuals who without a doubt were truly in need of the funds.
$1000 really would go a lot further then compared to a short 10 years later once the devastating devaluation of the US dollar was set into motion after it was unlinked to a universally appreciated natural resource (gold).
Anyway, turns out that before too long it was determined that it was costing $1200 to give away each $1000, and the program ended up grinding to a halt.
Fwiw, the country that Sam is referring to here is Switzerland.
This is hardly evidence that getting 2,000 control volunteers will be easy. Unlikely that the people who knew about the study and came forward are representative of the entire target test group on relevant criteria (e.g. income level). It's great to see support for the experiment and getting people to volunteer information without receiving money is a solvable problem, this answer just seemed evasive and promotional when a "you're right, it's going to be tough and we're working on it" would have been plenty justified.
Instead we should look at it from a geologist[1]/geolibertarian[2] perspective: as compensation for appropriation of land and natural resources that rightfully belong to everyone.
UBI should be funded by land and resource taxes, not from income, sales or corporate taxes.
https://news.ycombinator.com/item?id=15264024
It makes a fair amount of sense, and puts the incentives in the right place.
Besides, the existing American welfare system is ostensibly focused on providing a minimum standard of living to children, on the theory that kids shouldn't be punished for their parents' dumb decisions. A lot of the more glaringly stupid and inefficient bits are places where the relevant politicians wanted it to be for everyone in need but had to find some way to claim it was only for families without actually making it only for families. Having a UBI backing the welfare system removes a lot of the impulse to game the system and gives a lot more heft to the argument that children really should mean children and the archetypal broke 30-something bachelor actually should be on their own.
Issue (2) is likely to be a fraught issue no matter where the line is, but luckily in an American context we've already spent decades hashing out the boundaries of a well defined Social Security system. Have an SSN, get a UBI; no SSN, no UBI. That's probably not the best answer, but it's probably good enough to keep relatively small immigration issues from derailing the whole project.
The US has cut back welfare programs in both nominal and real terms many times, broad increases have been less popular. The fortitude to say no to benefits is not missing from our culture (if it were, the suggestion of UBI would have quickly led to its adoption without substantive debate.)
I don't have an authoritative source on the above claims, but here's a 538 article which talks about the issue a bit. https://fivethirtyeight.com/features/most-welfare-dollars-do...
"[reduction in cash assistance] has happened despite a burgeoning economics literature suggesting that direct cash transfers are in many cases the most efficient tool to fight poverty."
Issue (2) seems less cut-and-dry to me.
I'd argue that the culture is currently overwhelmingly biased toward saying "no," usually under the guise of "freedom" -- if we couldn't say "no" to the chronically homeless, we probably wouldn't have a half-million of them on the streets. If we couldn't say "no" to low-income mothers, we wouldn't have the highest maternal mortality rate in the developed world.
1) Let people make their own decisions and don't try to be their caretakers.
2) UBI should be universal. Ideally the impetus would not be on the US government or any other local government to implement it. Let's not conflate their responsibilities further, they are a large enough centralized point of failure.
That's some harsh darwinism that seems to go against the principle of UBI. You are mentally unfit (young, ill, sick, depressed, ...) ? Here is some cash, good luck with the wolves.
If people who need housing have the money to buy housing, but they're not buying buying housing, then I agree that's a problem that needs to be addressed. Do we see this in practice? Is there an epidemic of people who can afford homes but are choosing to suffer in homelessness?
If so, then maybe we can add some free level of shelter to everyone in addition to the basic income.
2. If you give the basic income to immigrants too, then they'll spend that money into your economy. This is a good thing. Withholding it from immigrants would probably be harmful.
I know you brought up the "global citizen" model. An easy way for us to achieve that model is just to start paying everyone in the world a basic income. Whichever country does this first will probably become the world's final superpower.
or Venezuela.
2. This "if you give the money they'll spend it in your economy" thing is I think by no means clear. The largest cash source in Mexico is remittance payments from the US. The reason I brought up the "global citizen" model is because there's a lack of skepticism and critical analysis on it and people make blanket statements like "the first country to give everyone in the world money" are actually taken seriously.
Exactly! UBI needs to go on top of our existing welfare system. It's a problem of freedom. Say I give you $300 and tell you that's what you live on this month. Well with $300 you can find a (crappy) shelter. You could buy food, pay your existing debt obligations, etc. But you can't do all of them. The money gives you freedom but not enough to do everything you need. Our existing welfare system is a god awful patchwork but the existence of all these separate systems makes sure that someone who is poor is still free to buy food AND pay for shelter AND pay off debt. UBI is adding another AND on to the list. We've progressed as a society, wealth is abundant but not shared so now you can buy food AND pay for shelter AND pay off debt AND ... whatever you can do with $12k a yr (or whatever the figure is.)
The intercoin project was started with the aim of letting communities issue and control their own smart cryto currency, and seamlessly integrate it into apps. Same as Paypal, VISA network, Venmo, FB do. UBI becomes just an app on top of that.
Then community membership becomes a question of the community members or government. Harvard university knows who its students are. Other communities might make decisions via direct democracy (polling not voting).
intercoin.org
There is a reason they keep getting mentioned.
I haven't seen a convincing argument for either half of this, much less the mutually contradictory combination.
This would be a mistake. Self-sufficiency is very inefficient. By pooling our resources, we can live much more sustainably and prosperously.
If everybody in the world tried to live like the Amish, we'd destroy the planet in no time. That lifestyle was only sustainable when there were far fewer humans.
Let's draw a parallel to cloud computing versus standalone computing, for the sake of familiarity.
While you sure can get reliable and scalable storage services for less money from a fat cloud provider, they're not equivalent to personally owned storage. For example access times and performance differ, mutually shared human language and the communications infrastructure become critical.
Let's draw a parallel to a windmill for flour production or a castle for military defence within a small community. What you wind up with is a de-facto political hierarchy emerging from centralization with its own dangers and overheads.
In summary perhaps nature has shown us that population-wide specialization is inefficient in the long term, and we should encourage diversity to survive black swan events... there is a middle ground between total self-sufficiency and totally shared infrastructure. The important thing is that we preserve a mix of approaches.
This is a very good point, and the basis of a lot of Bucky Fuller's work. He phrased it as being the most efficient when working for the good of the most people, and so accordingly all his design had global context. At one point he designed cities with domes over them!
If everybody lived like the Amish we might need to farm more land, but for example there wouldn't be much in the way of fossil fuel exploitation or mineral extraction.
Kinda of like what PG describes here. http://www.paulgraham.com/pgh.html
The reformers (Gracchi brothers, Caesar, etc) wanted Roman citizens to have their fair share of the actual land that Rome conquered. Not regular hand outs of grain. The idea was that citizens would actually own a piece of The Roman Dream. Land is income, then and now.
Never happened. The wealthiest Romans were successful in assassinating reformers and dominating the Roman 99% for a thousand years.
For an Excellent intro into Roman history see this very good podcast: http://thehistoryofrome.typepad.com/the_history_of_rome/arch...
Rome did not collapse because of UBI, if that is what you are suggesting.
We need to make damn sure that adequate opportunities to generate wealth ourselves remain so that UBI doesn't become the only income for large swaths of the population. That'd just put producers and UBI-only recipients at odds. Not to mention inflation pressures.
This is a legitimate concern, but it's at minimum partially addressed by the "as a share of the gdp" part.
We should also probably forbid Congress from increasing this share without a massively overwhelming vote.
https://en.wikipedia.org/wiki/Small_Is_Beautiful
For human beings, the number where a communal understanding can work and seem like magic is about 350. The missing key to understanding this, is the network of interpersonal relationships that form in any society. These networks are like strong fibers in a composite material, giving it a cohesion and tensile strength that the aggregate wouldn't have otherwise. Those who operate small companies know this firsthand.
A lot of collectivism is akin to selling concrete by advertising using the specs of reinforced concrete. It doesn't hold together as well as it should on paper, because there is something very important missing in the theoretical description. For larger numbers, in the millions and beyond, there needs to be some kind of larger organizational structure. Historically, this has been hierarchical, but other solutions could exist enabled by technology.
As Rome ran out of new conquests, the empire collapsed.
Compare that to whether or not modern society can provide for its members sustainably with UBI. By far, the biggest expense people have is housing - which is not limited by some natural law. One of the reasons for why housing on the coasts is so expensive is because people can't make a living in the rest of the country.
Here is a subreddit discussing UBI + crypto combinations https://www.reddit.com/r/CryptoUBI/
Personally, I believe that collective human interests can be accurately modeled with crypto currencies. Things like UBI, health insurance, other new unrealized collaborative goals likely will be modeled in this way. For example, if I could help end homelessness by accepting a certain coin for my goods and services, I likely would.
How did you check? Most research I've seen shows that welfare reduces poverty but does not drag down gdp.
Anti-welfare people tend to ignore the positive benefits of entrepreneurs being able to take more risks when they know that a bankruptcy won't be catastrophic and that they could still send their children to school and get treatment when they're sick.
Last I checked, UBI does not come with built in business education or introductions to movers and shakers.
I was homeless for nearly six years and actively trying to make business connections on HN, largely to no avail. No one wanted to take me seriously. Unsurprisingly, my income grew extremely slowly.
If I had a choice between UBI or connections, I would take connections in a heart beat. They are potentially worth millions.
Regardless, wouldn't UBI need to be higher for the sick, elderly, and disabled? Either it's high enough for them and too much for everyone else, or it's too low for them. Keep adjusting and you end up with a means tested welfare system like today.
Unfortunately, it has not resulted in human potential being unlocked.
Outside the mining, run by foreigners and with foreign works, economic activity in the country has gone down. Nauru now has the highest obesity rate in the world. 94.5% of the population is overweight, 71% obese, and 31% diabetic. https://en.m.wikipedia.org/wiki/Obesity_in_Nauru
I agree that some form of UBI looks to be better in many ways to what we have now, we can’t be blind that one actual historical outcome is a nation chronically ill, obese, and unemployed.
https://www.theatlantic.com/business/archive/2011/06/meet-na... (2011)
https://en.wikipedia.org/wiki/Mincome
>Mincome was an experimental Canadian guaranteed annual income project that was held in Manitoba, during the 1970s.
>University of Manitoba economists Derek Hum and Wayne Simpson analyzed labour supply or work disincentive issues in Mincome during the 1980s and published their results in a series of papers and a monograph.[2][3][4][5] Their results showed a small impact on labour markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women.
> Last I checked, welfare does the opposite of this. It helps people merely subsist, not strive for greatness.
It depends what you mean by "human potential." I agree with you that "human potential" is not the right way to frame what basic income unlocks. By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. We won't produce wealth that people won't buy and basic income allows more people to buy more wealth.
It also gives people the freedom to choose how they spend their time. We have a lot of pointless jobs in the economy that really only exist as an excuse to provide people incomes. A basic income can allow us to eliminate those jobs. The people who aren't working at those useless jobs anymore are now free to do something useful with their time.
So in that sense, basic income does unlock human potential. But by boosting demand and by doing it in a way that flattens out the demand curve, it unlocks resources in general, not just labor.
> If he weren't a millionaire and the current president of YC, would we keep seeing articles about his vision on the front page of HN? I don't think so. I don't believe his arguments are that cogent or compelling.
I agree with you that his arguments could certainly be more compelling. But he's not wrong that basic income would be a good thing.
> If you take Sam Altman out of this article, would we discuss it at all? If the answer to that is no, then why are we discussing it?
I would certainly be discussing it. Maybe nobody would be listening to me. But I've been involved with basic income since 2011 and I think it's hugely important.
Doesn't UBI reduce the economic productivity by both driving up the cost of labor through increased taxation and lowering the supply? Until (if) we are in a post-scarcity world how will lowering productive output ever increase the overall wealth?
I don't see how 1 Apple can offset 1 million unemployed, and really skeptical such a company could grow to that size/profitability under the necessary labor/tax system to support UBI.
This is a corollary to the myth that wealthy people hoard cash. They do not. 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it).
Examples, please? Who are the benefactors giving away these jobs?
EDIT: Parent's answer is at https://news.ycombinator.com/item?id=15919065
I disagree. Whatever you think about the quality of his arguments, the fact that the president of Y Combinator is writing about UBI makes it worth discussing for those who care about the topic, because he has significantly more leverage to affect things than most other people writing about it. Similarly, I'd be more interested in reading a poorly conceived piece on nuclear war written by Donald Trump than a brilliantly-crafted article from my nephew.
For the most part, we keep author names out of HN titles. It's a trick I learned from PG for keeping the focus on the content.
----
Name recognition seems to encourage reflexive upvoting, which is one reason we often take names out of titles.
We've removed "Alan Kay" from this one. (Nothing personal—we're fans.)
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But mostly we take the author's/presenter's name out of titles, in keeping with HN's emphasis on content over personalities.
https://hn.algolia.com/?query=dang%20names%20titles&sort=byP...
Whether this would be good or bad should be open to debate (preferably with evidence), but only two lines in your comment address this.
I mean the entire United States was founded on the belief that welfare unlocks greatness, because the founding fathers all believed that citizens wouldn't contribute to having a republic unless they shared in the ownership of the means of production. It's not like this is some crazy new experiment, we've been doing this for hundreds of years with everything from cod fisheries in the 1700s, the homestead act in the 1800s, ESOPs in the 1900s, tech startups in the 2000s, etc.
Source: https://www.amazon.com/Citizens-Share-Reducing-Inequality-Ce...
EDIT:
James Madison, the principle author of the US Constitution, in reference to a bill proposing to give aid to French refugees, had this to say: "I cannot undertake to lay my finger on that Article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."
http://lcweb2.loc.gov/cgi-bin/ampage?collId=llac&fileName=00...
You're not wrong, but UBI isn't exactly welfare - it's more like a blanket grant to pursue whatever it is you'd like. If that's sitting on a couch watching tv - fine, but most everyone would likely bore of that very quickly.
Citation needed.
EDIT: Provided by another comment: https://news.ycombinator.com/item?id=15918968
Someone who risks homelessness may have more incentive to find a job, but they're also going to have more difficulties. It's easier to look for a job on a full stomach; it's easier to look for a job with a roof over your head; it's easier to look for a job with internet access; it's easier to look for a job when you're not constantly worried about losing it all. Welfare gives you a stable place from which to find employment.
If your argument is that people abuse the position of welfare, and don't look for a job, then that's a criticism of its enforcement, not welfare itself.
Ok, so how about a counter argument then?
HN becoming the personal platform for the new YC president's political aspirations and personal pet social theories does not appear to me to be of any financial benefit to YC.
Does he have any friends from these walks of life? Drinking buddies down at the local pub maybe? How much of his time has he spent actually listening to them talk, befriending them, earning their trust?
I have many friends and acquaintances who have nothing to do with the tech industry, come from meager means and never rose above those means (economically speaking).
Many of these people just aren't ambitious. They have no interest in unlocking their "maximum potential." And there's nothing wrong with that. They're just not wired the way that tech industry hyperachievers are. Maybe they don't care a lot about money, maybe they're risk averse, maybe they don't understand how business works and find it boring. Some are stuck in a rut, but some have simply carved out a little routine which may seem unfulfilling to you but it works for them.
These people will probably accept UBI if you offer it to them but UBI emphatically will not motivate the majority of them to become the next startup founder. Or anything other than what they are now.
I'm guessing Sam (like many on HN) lives in a bubble of hyperachievers and the people in this bubble have a really hard time understanding that most of the world isn't like them, and doesn't want to be.
YC applicants are nothing like the general population. A lot of people just want to coast. And there's nothing wrong with those people.
Most people don't have time to be ambitious because they're too busy subsisting. If the subsistence were taken care of, wouldn't you expect them to do better? Not everyone will suddenly start a billion-dollar endeavor, but they'd have more time for recreation, learning, political engagement, and yes, maybe even economic entrepreneurship - in other words, being their best selves, even if for some individuals that still isn't all that impressive.
Part of that brand has to be 'benevolence'.
In tech, it's important to be seen as 'the good guys'.
'We're on a cause to help, the money is secondary' - is the basis for a SV company brand.
Understand that the materiality of the benevolence is irrelevant. Only the perception.
The soon to be Princess Merkle (or whatever) and Angelina Jolie spend a little bit of time making speeches written for them - and all of a sudden they are 'amazing, altruistic people' - irrespective of their actual commitment. And it's bizarre how intelligent people eat it up and believe it. We ignore the middle aged lady down the street who volunteers at the Salvation Army two days a week about it and doesn't say a peep about it, doesn't put it on her resume.
So the dissonance between the 'reality' of some way to help and the words of the auteur don't really matter that much.
I don't entirely believe this is just all for show or disingenuous, but I do also believe that it's part of the resume building elements of individuals and organizations.
Remember Google's original premise was to do something about 'ads that were destroying the internet' and to 'do no evil'.
This PR and brand positioning - even if everyone on the inside has fully drunk the kool-aid and believes it to be true. In fact, it works better when founders drink their own kool-aid.
But to say that YC is doing more good for humanity than Airbus ... is debatable.
Just some very minor legislation that changed how drugs and medical services are priced ... could yield some pretty big social change in terms of quality of access etc..
So we don't want to be too cynical, just enough to recognize that public figures calling for some moral thing usually have something indirect to gain from it personally.
Well, during that time they did replace the obnoxious flash/gif ads of the day with unobtrusive text ads, and iirc mostly did no evil.
> We ignore the middle aged lady down the street who volunteers at the Salvation Army two days a week about it and doesn't say a peep about it, doesn't put it on her resume.
The problem with silent altruism of this sort is that Angelina Jolie donating a few million to some cause will be less effective (in her particular situation) to that cause than Angelina Jolie donating a few million and also running a social media blitz to raise another few million from fans. I understand that as a side effect she might become more popular, which might lead to more lucrative movie contracts, etc. But I wouldn't even begin to be cynical about this until it was pretty conclusively demonstrated that her net benefit (from increased popularity, or whatever) actually exceeded her own interest (e.g. what some despicable televangelists do.)
Do you have an alternative for UBI? If so please provide you theory and factual data to support that will help people "strive for greatness"?
http://micheleincalifornia.blogspot.com/p/ir2.html
I am not looking to help people strive for greatness. That is Sam Altman's goal.
But what I do try to do is preserve freedom and agency for the poorest of the poor. My first attempt to do that is here:
http://sandiegohomelesssurvivalguide.blogspot.com/
My current project for trying to help the most vulnerable people around me take control of their lives is here:
$12k is the cited number that you see a lot in basic income discussions. That's just over the poverty level. That's not enough to live on and it's practically a bonus for some members of this site. It's not enough to do anything with. Even upon receiving that, many people would still work massive hours to obtain the best house on the block.
But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget.
Now basic income advocates will say you can make up some if not most of that by cutting welfare programs, but given the nature of welfare programs - good luck. That UBI stipend is also not enough to pay for healthcare, so you can't cut that.
How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?
I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today. There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.
I was born in socialist country (Czechoslovakia) in the late 70s. It was inefficient system (the productivity of the most advanced economies today is about 3-4x times higher), and yet it was able to provide housing, food, health care, education and even decent culture for more than 90% of the population. And all this for about 30 hours of real work week.
So think about it, why is that? I think the social inequality is much larger than people are willing to admit, and much larger portion of it are mostly nonsensical expenses (rents, unneeded business travel, status displays..) due to requirements to maintain the social inequality.
Hitting FPL is a good minimum for considering a UBI scheme “mature”, but 100% of the single-person-household FPL per capita is probably not the right starting point. If you target hitting 30% of the FPL in a two-person household—$2500/person-year—you’ll beat most state’s TANF benefits, which seems a good starting point; if you tie it to a funding stream that grows with the economy, you progressively improve the coverage letting you scale back and decommission existing benefit programs.
> Even upon receiving that, many people would still work massive hours to obtain the best house on the block.
As long as people can find work, people working on top of even a mature UBI is central to it's point, and the big reason it is unconditional is to encourage this.
So maybe $7000 can get you everything you need, including healthcare. People pay extra money for their house to be close to work. With no work, maybe that will open up places people will want to live.
I'm no UBI expert, but I don't think you understand the point of UBI: universal basic income. I would argue (again no expert here) it's more about constant economic injection, providing a baseline to reduce risk of entrepreneurship and generally providing a higher quality of life to the 99%'ers.
As far as paying for it or finding the right way to make it happen in the US, I agree that there are a ton of roadblocks. Right now welfare is at $1.3 trillion, let's say that was increased to $2 trillion; divide by 300 million Americans and you've got over $6,500 per American per year. Just over half of what you stated is the typical amount discussed. That being said, I could certainly find a good use for an extra $500+ a month in income.
> How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?
I think it's the politicians and the news media that twists this, Americans in polls generally do support single-payer health care and I would posit this same sentiment would be shared for basic income (if not more support since it's quite a bit easier to understand)
I'm happy to discuss the math with you any day of the week. One of the biggest misconceptions that many people have is that the basic income (or any government funding) must somehow be funded through taxes.
That's not how money works.
There's a limit to the amount of government spending that the economy can productively absorb and that amount has very little, if anything to do with the amount of tax revenue that the government collects.
> But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget.
If you try to do this using conventional budget math, you're not going to get the right answer.
> Now basic income advocates will say you can make up some if not most of that by cutting welfare programs
No. This is a terrible idea and it's due to the same misconception.
I agree with you that most basic income advocates don't understand the underlying economics. But the underlying economics are nevertheless sound.
> How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?
Yup. Politically, it would be very difficult to accomplish. That's why we have to do it ourselves.
> I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today.
If you're interested in digging deeper on how this could work, I'm working on an economics paper that describes the economics of a basic income.
Here's an abstract: https://drive.google.com/file/d/0B9KDLUTAOkduOXdNQWl3REw4eWc...
Email me if you're curious about reading the full thing.
> There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.
We've been undergoing this paradigm shift for centuries. It won't reach its full potential without a basic income to allow people to take full advantage of the wealth we're already capable of producing.
Wrong, utterly wrong, on accounts.
> It's not enough to do anything with.
You have no idea what it's like to be poor. I grew up poor in America. $12k per year is an absolutely life-changing amount for many people. It means you will not go hungry. It means you will not die of exposure. It gives you bargaining power at work: it means there are degradations you will not subject yourself to in order to earn more money.
> Even upon receiving that, many people would still work massive hours to obtain the best house on the block.
Yes, that's fine. UBI is not supposed to replace work.
> But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget.
I'm sorry, I'm going to swear... please don't take this personally, but I've been talking hard numbers about UBI for years, and it's the anti-UBI people who can't do the fucking math.
Here's a math problem: You give me $1 and I give $1. How much did that cost you? NOTHING. -$1 + $1 = $0. That's how math works. Are you with me so far? Good, thank you, please stay with me.
The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. You can't add up the cost without also adding the benefit. Because it is a straightforward cash transfer, the National cost plus the total benefit would be zero. But of course what people are really interested in is how much it would cost them.
The per capita Gross National Income is $58,000. To extract $12,000 from that $58,000 would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them ZERO. That is how math works.
Of course the person earning earning $100k will also have to pay 20%, and they of course they would also receive $12,000 -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%.
So while it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down:
Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1]
---------------|-----------------|--------------|--------------|---------------
$0 | $12,000 | + $12,000 | N/A |
$20,000 | $28,000 | + $8,000 | N/A | 35%
$40,000 | $44,000 | + $4,000 | N/A | 61%
$60,000 | $60,000 | N/A | N/A | 77%
$80,000 | $76,000 | - $4,000 | 5% (4%) | 86%
$100,000 | $92,000 | - $8,000 | 8% (6%) | 91%
$120,000 | $108,000 | - $12,000 | 10% (7.5%) | 93% (?)
THAT is how you finance a UBI. It's easy math.
1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
"just over the poverty level" is pretty much the definition of "enough to live on". If it isn't, the poverty level is set wrong.
Anyway, according to https://en.wikipedia.org/wiki/Personal_income_in_the_United_... 22.77% of the people in the US age 15+ (12.5 million persons) had an annual income of $12.5k or less.
> Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? Some of the concrete ways this could happen are through the transfer of existing federal assets like land, buildings and portions of the wireless spectrum into the new fund. Other measures could include increases in taxes on capital that affect mostly the wealthy such as estate, dividend and financial transaction taxes and the creation of a new type of corporate tax that requires companies to directly issue new shares to the social wealth fund on an annual basis and during certain corporate moves such as initial public offerings, mergers and acquisitions.
> Another way to bring assets into the fund would be to modify the way the Federal Reserve pumps money into the economy. Currently, the central bank does that by buying up Treasury bonds. If instead we used newly created money to buy up stocks that are then deposited into the social wealth fund, it would gradually socialize wealth ownership without the need to raise taxes on anyone. As Roger Farmer and Miles Kimball have argued, these kinds of asset purchases could also be ramped up during recessions, allowing the federal government to acquire significant portions of the national wealth relatively cheaply while also stabilizing financial markets and stimulating the economy."
Noah Smith makes the additional economic case that a social wealth fund is a buffer against decreasing labor share of income driven by technological change: https://www.bloomberg.com/view/articles/2017-12-05/robot-tak...
The government doesn't face what we would think of as a typical budget constraint. There is a limit to how much money the government can spend, but that limit is determined by how much spending the productive economy can absorb without causing inflation or interest rates or taxes that are too high. It's the amount that closes the output gap without attempting to push past it.
The only way we can discover the appropriate amount of basic income by gradually ramping it up until further incremental increases no longer provide a benefit.
So net-net, it's only the bottom end of the income levels that keep the entire payment.
> How would a BI work
By increasing revenue, for one thing.
> Seems like BI would need big tax increases to become viable.
Yes, essentially no one, including BI proponents, disputes this.
That's an interesting point, especially concerning the US. My understanding is that many (not all) people join the US military mainly because they can't get other jobs or find other ways to finance college. With the UBI, this motivation will disappear, and with it a whole lot of military spending.
Because I've heard everything from what you're saying, to negative income tax, and to flat, unweighted income for everyone.
The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. So you can't add up the cost without also considering the benefit. If you give me ten dollars and I give you nine dollars, it doesn't mean that you're down by ten dollars. UBI must be looked at in this way. At a national level, it's just a straightforward cash transfer. The national cost plus the national benefit would simply be zero.
But of course what people are really interested in is how much it would cost them.
The per capita Gross National Income is $58,000. To extract a $12,000 UBI from that $58,000 -- via a simple individual flat-tax -- would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them zero.
Of course the person earning earning $100k will also have to pay 20%, and they of would only receive $12,000 back as UBI -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of this UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%.
So although it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down:
Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1]
---------------|-----------------|--------------|--------------|---------------
$0 | $12,000 | + $12,000 | N/A |
$20,000 | $28,000 | + $8,000 | N/A | 35%
$40,000 | $44,000 | + $4,000 | N/A | 61%
$60,000 | $60,000 | N/A | N/A | 77%
$80,000 | $76,000 | - $4,000 | 5% (4%) | 86%
$100,000 | $92,000 | - $8,000 | 8% (6%) | 91%
$120,000 | $108,000 | - $12,000 | 10% (7.5%) | 93% (?)
THAT is how you finance a UBI.
1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
> US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with.
> How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.
The numbers haven't ever and will never add up, unless you just advocate straight-up jacking the taxes on the upper brackets sky-high.
How's that?
> The right question is "how do we unlock the economy's prosperity-maximizing capacity?"
Asked and answered: free-market capitalism. Nothing has resulted in the sort of rapid prosperity we've seen recently with market capitalism spreading globally.
Kind of. Free-market capitalism has advantages in some situations. But you also have markets that "freely" tend toward monopolies or oligopolies, which end up leaving the majority of consumers in the lurch.
Over time, most systems including markets will be gamed so that certain elites reproduce their privilege at the expense of their fellows. This is true of free markets just as it is true of command economies.
But prosperity for whom, most people aren't satisfied with a system that drastically increases the GDP of their country but where they as an individual don't increase their standard of life at all. As globalization and technological progress increase, prosperity will result but it will become more and more concentrated. When you totally sacrifice 10% of peoples wealth (say Detroit auto workers) to make the other 90% better off and you do it over and over again, you're going to end with an extremely wealthy elite of people who snuck past ever being part of the 10%.
It's what I'm working on right now: http://www.greshm.org
> > The right question is "how do we unlock the economy's prosperity-maximizing capacity?"
> Asked and answered: free-market capitalism. Nothing has resulted in the sort of rapid prosperity we've seen recently with market capitalism spreading globally.
Capitalism can't exist without government and government can't exist without capitalism. They are yin and yang. I agree with you that capitalism is an important piece of the puzzle. By providing people with a basic income, we can make sure capitalism reaches its full potential in supporting social prosperity.
Nothing about UBI is opposed to free markets, unless you think paying taxes is not compatible with free-market capitalism.
I would say no. The main benefits of basic income are increased levels of economic stability and increased levels of social prosperity.
It may end up being the case that after we implement a basic income, we discover that our society does not need some of our welfare programs. Then we can eliminate them. But that's not the main benefit of basic income.
No no no. The Universal means it's given to everyone, not that it is the universal welfare program.
It happened gradually. But wars usually put stress on the gold system. They caused the fault lines to slip, so to speak.
The US Dollar was the last major currency tied to gold and we finally severed that tie in 1972 when the Bretton Woods system ended.
And the reason it happened is that in order for prices to remain stable, we needed to be able to adjust the amount of money flowing in the economy to an extent greater than gold would allow.
> It requires government manipulation by price fixing, outright debasement and mechanisms like legal tender laws for worthless tokens to win out over a precious metal such as gold.
Yup! With the rate of economic growth outstripping the rate at which we could mine gold or spend new gold certificates into the economy, gold just simply wasn't going to cut it anymore as a stable basis for a currency. In order for markets to function smoothly, we needed a currency that could be actively managed.
But I don't accept that! And I doubt I'm not alone in this country. I believe that you are the work you do. If you spend the majority of time doing it, then that's who you are and you should own it and be proud of it.
> if you're talking about their freedom to do something...if you're talking about society in general it seems obvious that certain behaviors are bad and should be discouraged
Okay. So you want to discourage people buying cheetos and drugs. That's fine. I agree that they can both be unhealthy. What's a good way to discourage the purchase of these items?
Furthermore, pretty much any activity choose to spend your time doing can fall somewhere on the continuum of worthwhileness. And different activities are worthwhile to different extents to different people. But to what extent should we be judging people's activities and disallowing certain activities? Should it extend into how they spend their money? Does it make sense for these restrictions only to apply to poor people? Why? I'm not saying there's an easy answer here. I agree with you that some people need help making the right decisions sometimes and I agree with you that we need laws to protect people.
> but if you're going to tax me, and then give this money away to people it seems reasonable that i should have at least some say in what it's spent on
I haven't said anything about taxing you. I'm not talking about taking your money and giving it to someone else. I understand that some basic income proponents think that it has to be "funded" through tax revenue, but I feel that it's a mistake to frame things in this way. Increasing taxes doesn't increase the level of basic income we can afford.
That being said, the purpose of the government is to represent the collective interests of the people, so you absolutely should have a say in how the government spends their money (it's not your money). And if you have strong feelings about how certain types of spending will help or hurt people, then you're obviously free to voice those concerns.
But I don't see how it hurts people to give them money they can spend on anything they choose. And if we really want to deter people from buying drugs and cheetos, I'm not sure that putting absolute conditions on how poor individuals spend their income is an optimal way to achieve that.
> which just gets us back to the same discussions about what UBI evolves into and the kind of culture changes required for it to work (if it's even possible for it to work...that is not a certainty).
You've been alluding to a required culture change. What would that entail, specifically?
> This "if you give the money they'll spend it in your economy" thing is I think by no means clear. The largest cash source in Mexico is remittance payments from the US.
Well, some of the basic income will get spent in our economy. To the extent that some of it goes straight to Mexico never to return, it's roughly the equivalent of the government spending money by tossing it down a hole. That portion of the spending has no effect on our economy. This means that we can increase the amount of the basic income even further because our economy has left over capacity to absorb more spending.
> The reason I brought up the "global citizen" model is because there's a lack of skepticism and critical analysis on it and people make blanket statements like "the first country to give everyone in the world money" are actually taken seriously.
Fair enough. I am often not taken seriously when I say things like that. But that doesn't mean I haven't thought about it thoroughly. So thanks for taking me seriously and asking me questions to try to understand where I'm coming from.
[1] https://www.npr.org/2017/05/12/527806002/focus-on-infants-du...
The main problem I see is most people promoting it want to set it so high that the figures just don't add up.
Then apply that thinking to Monsanto, Tyson, Archer Daniels and their pricing power on food staples.
Different people used different definitions of basic income. As far as I know, the most commonly accepted definition says nothing about the amount. But I have heard people say that it's not a "true" basic income if it's not above a certain level.
At the same time it's too small because Americans are already far better off than most of the world, so if anyone really needs UBI it should be the poorer per capita countries, funded by the richest in the world. In other words UBI for Americans only misses the point.
On the other hand, I'm fairly sure China had a civil war that established a communist dictatorship before it had an efficient national ID system.
A breakpoint is when you earn $X, and that's low enough to get $Y in welfare. But if you work longer/harder the total amount you get is still $X+$Y because your welfare amount is reduced dollar-for-dollar with your earnings above $X. You don't start to increase your income unless you manage to earn more than $X+$Y entirely on your own. This creates a huge disincentive to earn more than $X, because for most people at that income level the jump to earning $X+$Y seems insurmountable.
They're everywhere. We could have let GM die. We could abandon all tariffs on imports. Any time a policymaker uses "job creation" as a selling point for a policy initiative, that means jobs that exist for the purpose of providing people with incomes.
Even the Fed has "full employment" as part of its dual mandate. The private financial sector funds small businesses that probably shouldn't exist. We still have local farms producing food when large-scale farming is far more efficient. Now that's fine if it's your hobby and that's how you want to spend your time, but we actually subsidize farming.
Or they'd have more time for Call of Duty and Netflix. Seriously, not everyone aspires to be their "best" self per the definition here of overachiever in multiple endeavors. It might seem inconceivable, but there are many people who have no interest in being the best any of those things.
Interestingly absent from these laundry lists of things to be best at: parent, friend, spouse.
- Some as you say want to be ambitious and giving them UBI for subsistence may unlock that creative energy. Perhaps they'll do great things with their time. On the other hand, it'll remove some pressure to make what they're doing efficient, scalable, and market-oriented, so in my opinion you're much more likely to get people who collect UBI and pursue hobbies, not build world-changing businesses or "unlock their maximum potential." But hey, no problem with that. This happens to be how a few people I know who have been on welfare for years behave.
- Then there are the people who find meaning in what they're doing even if it is menial: for instance working in a rote job which isn't a lot of fun but provides for their family. You eliminate the rote job and put them on UBI and they're probably going to be less happy because they liked the structure that job provided. In the absence of a clear, structured alternative for getting back into the workforce they may just subsist in a less happy state indefinitely on UBI. For these people UBI is worse than temporary, conditional assistance which requires them to at least make a token effort to look for work.
- Then there are the nasty people. The guys who haven't worked a day in years, and when they get some money, they spend it on booze, gambling, start screaming at the TV, start screaming at their wife, maybe beat up their wife or kids for good measure before they pass out and do it again the next time they get some cash. These people are out there and by giving them UBI you've just made it easier for them to be their scumbag selves.
I think my main point here is that people are incredibly diverse in terms of motives and behavior. UBI is the wrong solution precisely because it's universal. To me it's a little insane that anyone would propose a single program and expect it to work nationally or globally for everybody. My bias is that people who think this must live in a bubble or have a romanticized view of the human race.
> This is a corollary to the myth that wealthy people hoard cash. They do not.
It depends on your definition of "hoard." I agree with you that they don't literally stuff it into mattresses... usually.
> 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it).
I agree. But a question we might ask ourselves is how much of that money is invested productively. In other words, how much of it flows back into the hands of the consumers for the purchase of useful wealth that benefits them? The answer is: not all of it.
Then we can ask ourselves how much of that money flows into the financial sector and accumulates there without fueling the productive economy. The answer is: some of it.
From the perspective of the productive economy, the result is the same as if rich people were stuffing their money into mattresses.
So that money needs to be replaced. Historically, to the extent that we've replaced that money, we've tried to do it through the labor market and we've been moderately successful.
One of the things we do is monetary stimulus that increases the amount of lending in the private financial sector. Some of that lending goes to the creation of jobs that we probably don't need. It also destabilizes the economy by fueling credit bubbles like the one we saw collapse in 2008.
Basic income is an alternative. If you prefer, you can think of it as a form of fiscal stimulus that would allow the Fed to normalize interest rates.
a. doubling the amount of money each individual person has.
b. distributing that new money evenly across every person.
In the former case, the demand curve would get steeper, no? And in the latter case, it would get flatter.
In case a, you'd decrease the price elasticity of demand and people would have an incentive to raise prices. You'd have inflation.
In case b, you'd increase the price elasticity of demand providing an incentive for producers to keep their prices lower and compete with each other on price.
Of course it all depends on where on the demand curve we're talking about. But for many of the goods we produce, their market-clearing prices are at a quantity such that they would benefit from an additional even distribution of income to every person.
We don't consider that because we maintain the polite assumption that people get paid from social security after they retire because they paid into it while they were working. There are plenty of cases where that's not true, but we allow ourselves to treat them as outliers, and assume that the money people get from social security is basically "their" money; the government just saved it for them.
UBI removes the option to think of things this way. I think a lot of UBI proponents have not fully considered the implications of that.
It's an uphill battle to be sure.
It's not an "attitude", it's a fact of life. In order for you to eat, a certain amount of work has to be done. Why should someone else do it if you're perfectly capable? We've already made it a lot easier for you by having a huge economy where you can do all sorts of things that can be traded for food, instead of having to grow all your own food yourself.
The attitude that really needs to be confronted is that the amount of work that needs to be done by some human in order for that human to eat is fixed. It isn't; technology can reduce it. (And in fact it already has, by quite a lot; that's why only about one in twenty people has to work at growing food today, compared with about 19 in 20 a couple of centuries ago.) But there are huge political barriers to technology reducing it further: governments meddle in all kinds of ways that artificially inflate the cost of getting enough food and other necessities. What we really need to do is stop doing that, so entrepreneurs like Sam Altman can use technology to make necessities so cheap that nobody will have to worry about UBI, because anyone who isn't actually disabled or otherwise incapable will be able to earn a living.
I'm not sure you can generalize Venezuela's collapse beyond a cautionary tale of corruption and populist looting; i.e., their economic problems are fundamentally political problems. A better comparison for a developed Western democracy with competent political system is Norway, which has an amazingly successful ($1 trillion) sovereign wealth fund https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... comprised of oil revenue used to fund social programs.
1. Incentive to game the system.
2. Social stigma to receiving benefits.
3. High administration cost.
UBI is the only welfare system that eliminates all three.
If it's means-tested, it's not a UBI; the “U” is ”Unconditional” (less often “Universal”, with the same meaning) indicating that everyone in some defined population gets it without means, needs, or behavior-testing, specifically.
> Regardless, wouldn't UBI need to be higher for the sick, elderly, and disabled?
With a UBI, existing benefit or social insurance programs that aren't primarily means tested but address other special needs might need to be maintained, including programs offering special support for the aged, blind, and disabled.
This is different than a means-tested safety nets, though.
My point was, any typical Western country can provide all basic necessities (actually lot more, 70s lifestyle in CS wasn't just basic) for its population (an excellent basic income) with maybe 30% GDP (because of the higher productivity) and 80% employment tops (more likely somewhat less). Surely, you can do better than Czechoslovakia in the 70s! So how come we can't find the money, if the resources (energy, labor, materials) are all there?
And if 30% GDP is spent on basic income, the remaining 70% can be subject to the capitalist competition. (That's my understanding of the UBI - we basically put aside a portion of GDP that we are not going to compete about in capitalism. It keeps the profit motive going but the poor people aren't starving or forced to work for non-livable wages.)
Economists just sometimes focus too much on money and lose sight of the real thing.
I'm very curious about this part, particularly in light of your comment elsewhere that "It's possible to implement basic income without any direct government support." I feel like there are very interesting answers being alluded to in your posts but none actually presented.
If you don't feel like clicking the link, I'm developing a USD-backed basic income system that does the equivalent of deficit spending to fund a basic income.
If you think that sounds crazy, then most people agree with you.
An immature UBI probably doesn't eliminate all means testing, it just increases from $0 the support level below which benefits aren't subject to a means test; which has similar but reduced benefits in terms of incentives (but lower cost) than full replacement of means-tested programs.
And, it's a pilot, not even the main study.
> The pilot seems to be just piling UBI onto people's existing federal/state/local welfare checks.
I think that's a misreading; it sounds like they did work to avoid beneficiaries losing non-cash aid like housing subsidies and food assistance, but it doesn't sound like (for people eligible to cash aid) they did anything to protect that, so the income would seem to reduce such benefits the same as other outside income would. (Which probably wipes out General Assistance eligibility, but might leave some TANF eligibility.)
> And additionally the pilot is giving it to people not already on welfare.
That's what the U in UBI is all about.
As a person who was born in the USSR those kind of proclamations always amuse me. I am wondering how much taxes are being paid by those people thinking that 90% tax rate will not create a feedback loop that will drastically worsen living conditions for everyone. My personal ancodote is that when I check it turns out those people rarely pay any taxes at all.
Also, in reference to your Madison quote, in The Federal Papers he expressed the fear that if the majority of Americans didn't own land then they would vote to take away the property rights of those who did. His solution was "extending the sphere", aka making the country large enough so that everyone could own land. That way the government could give away "free land", but that once individuals already owned personal land the government wouldn't have to take it away in redistribution programs or whatever. He was never able to come up with a longterm solution, but he recognized that it was a fundamental problem that could eventually destroy that republic.
History books don't say stuff like this. You are making ahistorical arguments about men who owned slaves.
My own guess is they hate when someone links to their own project. Every time I put any link to my projects I get a few downvotes no matter HOW good the rest of the comment is.
I have found the factor that earns downvotes is a link to your own project - the downvoters don't engage you fairly after that.
The principle of UBI is exactly that; give people some money with no strings or instructions and let them make their own decisions. If it's conditional, it's not universal.
You can't just give a lump sum of money to a guy with down syndrome and hope he will figure out what he needs without some sort of external assistance, i.e. some sort of welfare program.
So either UBI is just the most cynical attempt at social darwinism and eugenics in a long time, or UBI needs to be complemented by something that looks very much like the current set of welfare program.
It is easy to see that UBI can somewhat easily be funded, however (UBI + welfare) is a completely different matter.
Right now the solution to that hypothetical poor down syndrome man is the salvation army and living on the street. I see it every day with a variety of mental health issues outside my luxury apartment. The disparity is sickening, and our system is failing it's people immensely.
Personally I'm very hopeful that a combination of gene editing and AI will alleviate malodies and allow everyone clarity of thought.
Who is this "we"? When I translate what you say into plain English, what I get is: One in twenty people will grow food and be forced to give it to everyone else, whether they want to or not. I agree that is an outdated ideology, yes. But the fact that food needs to be produced somehow is not.
> we can't find jobs for everyone
Again, who is "we"? Whose job is it to find jobs for everyone? Why is that necessary?
> Automation will make it worse
Automation can make things cheaper and cheaper; that's why it has continued to increase. That's making things better, not worse.
What makes things worse is pretending that products and services, whether produced by automation or any other means, will magically get distributed to where they are needed, or that "we" will magically decide correctly how that is to be done. That is indeed an outdated ideology, but unfortunately many people have not yet gotten the memo.
What will make things better is admitting that products and services have to be produced, and then traded for other products and services, in order for people to get the things they need. So the more efficient that process is, the less effort it will take for people to get the things they need, and therefore the easier it will be for them to do so.
If the paychecks stop coming and nothing replaces them, consumers stop buying and you get a recession or worse. The key is to keep the money flowing from companies to consumers in some other way. The clever bit with the "Great American Share" idea is that the money gets collected via dividends instead of taxes.
If you're interested in going deep on this stuff, I highly recommend this MOOC:
https://www.coursera.org/learn/money-banking
He doesn't talk about basic income, but this class really helped me understand the nature of money and economic policy.
If you're curious about more about the economics of a deficit-funded basic income, I'm working on a paper about that. Here's the abstract:
https://drive.google.com/file/d/0B9KDLUTAOkduOXdNQWl3REw4eWc...
Feel free to email me if you're interested in reading the full paper. It's over 50 pages long, but it's not very mathy and should (hopefully) be accessible to non-economists.
https://en.wikipedia.org/wiki/History_of_Nauru#Modern-day_Na...
>As its phosphate stores began to run out (by 2006, its reserves were exhausted), the island was reduced to an environmental wasteland. Nauru appealed to the International Court of Justice to compensate for the damage from almost a century of phosphate strip-mining by foreign companies. In 1993, Australia offered Nauru an out-of-court settlement of A$2.5 million annually for 20 years. New Zealand and the UK additionally agreed to pay a one-time settlement of $12 million each. Declining phosphate prices, the high cost of maintaining an international airline, and the government's financial mismanagement combined to make the economy collapse in the late 1990s. By the new millennium, Nauru was virtually bankrupt.
When an economy is optimized for resource extraction and export, all sorts of basic social and infrastructure needs are neglected because it's more profitable for the colonizing power. I'm not sure if you were looking for a direct "phosphate mining = obesity" connection but given every example of colonialism that comes to mind, it's not really that much of a stretch.
And with regard to those fines, it sounds like they took control of mining in 1967, almost 40 years before the supplies ran dry. Given that amount of time, and that they had the resources to a) levy no taxes on their citizens and b) provide a UBI, I think that's enough time to at least share in the responsibility for whatever situation they currently find themselves in.
Whereas today capital is considered to be mainly money, because owning money is how you make more money. E.g. by investing in Google in the 90s, Bitcoin in the 2000s, etc.
So giving people money today is basically the equivalent of giving people land in the 1700 and 1800s.
No.
While money is used simply to purchase goods and services for consumption, capital is more durable and is used to generate wealth through investment. Examples of capital include automobiles, patents, software and brand names. All of these items are inputs that can be used to create wealth. Besides being used in production, capital can be rented out for a monthly or annual fee to create wealth, or it can be sold when it is no longer required.
EDIT: Also, I wouldn't say that it's necessarily a good thing that we're discussing this. Moreso, my point is that the value of a piece of writing isn't completely disconnected from who wrote it, nor should it be.
There's an optimal amount of basic income for social prosperity and it would be an amazing coincidence if that amount happened to be exactly enough to provide for people's basic needs and nothing more.
I agree that basic income won't kill ambition. But I don't think it's because we're withholding money from people. It's because people are naturally ambitious and competitive. Just because you have wealth doesn't mean you don't want more.
Maybe some people won't be ambitious, but that's not exactly a problem for those of us who are.
> Contrast to welfare where if you earn anything the welfare is taken away.
Yeah. I agree with you on this part.
In Germany part of the basic rights granted by law is human dignity. Part of human dignity is participation in culture and society. As such the closest thing germany has to UBI includes a budget to permit participation in culture.
We should overhaul our existing programs to provide graduated phase outs instead of creating new entitlement programs.
I see UBI in general as having far more perverse incentives than welfare does right now (and they are bad).
Government is the source of all wealth. So administering cashectomies is a fine way to mitigate hoarding.
Once our Ginni coefficient is dragged back into the "democracy promoting" realm, we can talk about liberal over reach.
Labor is the source of all wealth, not government.
> Once our Ginni coefficient is dragged back into the "democracy promoting" realm, we can talk about liberal over reach
What exactly is the democracy promoting range? How does it promote democracy exactly? The richest Americans are nearly split between democrats/republicans, so this isn't a 1 party issue.
I don't think UBI is over reach, I think it's bad policy.
Autonomous cars are on the roads today. They're a ways off from serving as reliable truckers or taxis, but that's in our future. We're seeing rapid advancements in machine learning, especially in computer vision and abstract strategy games.
Trucking alone accounts for 5% of the US GDP [1], and employs 1.7 million Americans annually [2]. That's about 1/10 of the total US workforce. Taxi drivers and support staff for trucking are smaller occupations that are also at risk. What happens if all those jobs disappear overnight?
Hopefully the people in those jobs will successfully transition to other careers, as many did after the industrial revolution. But it might not be pretty in the short-term. I don't think it's irrational to be concerned about this.
1. https://en.wikipedia.org/wiki/Trucking_industry_in_the_Unite...
2. https://www.bls.gov/oes/current/oes533032.htm
aside: Wikipedia has some nice graphs, but shouldn't be considered reliable. What's the best source of economic and labor data in the US (or other advanced economies), aside from Bureau of Labor Statistics?
This roughly translates to "we've programmed a computer to beat a human at go and trawl your facebook pictures and identify pictures of flowers but have yet to build a robot that will clean your bathroom".
>Autonomous cars are on the roads today. They're a ways off from serving as reliable truckers or taxis, but that's in our future.
I'll become a real and true believer that autonomous cars are the future the minute an executive at an autonomous driving company agrees to shoulder criminal liability for crashes caused by defects in the cars they sell. If I can go to prison for reckless driving, an exec should go to prison because their cars engaged in reckless driving. That's fair, right?
What I have seen currently is a lot of backroom lobbying to try and shift liability in order to open the floodgates to this "brave new world". To me that's sending a clear signal that the executives themselves aren't totally convinced of the safety of their new technology.
Ultimately where the legal liability falls is going to determine how, when and if self driving vehicles become more than just toys, and, ultimately, how many people they will kill.
>What happens if all those jobs disappear overnight?
1) Jobs never disappear overnight.
2) Trucking involves a lot more than just driving.
3) Even if it did happen a 5% increase in employment to counteract "the end of trucking" could be enacted relatively easily by the government simply by removing the fiscal spending brakes. The deflationary impact of trucking being automated (and presumably much cheaper) will presumably counteract the inflationary impact of any increase in govt spending.
4) They can get other jobs? Typists used to be a very common job too. The world didn't end for them when computers came along, did it?
Meanwhile, still patiently waiting for that robot that will clean my bathroom. I mean, if a robot can beat me at go, how hard could it be?
It's no longer a Universal Income when someone who makes $120k contributes $12k... and then receives 0. That's just wealth redistribution.
Did you click the link in the post you're answering to? Among many other interesting things, it says: "Of those individuals with income who were older than 15 years of age, approximately 50% had incomes below $30,000 while the top 10% had incomes exceeding $95,000 a year in 2015." The source it gives is this, from the Bureau of Labor Statistics: https://www.bls.gov/news.release/pdf/wkyeng.pdf
You're right that there is regional variation, some of which you can explore at https://en.wikipedia.org/wiki/List_of_U.S._states_by_income and https://en.wikipedia.org/wiki/List_of_United_States_counties.... By no measure are you "pretty f'ing middle class" in CA or NY if you earn $100K a year.
You could adjust it to take cost of living into account. You could adjust it to be slightly over 20% but let the first $200k be tax-free.
The parallels with basic income are clear. How many people are out there with the potential to be one of the best in the world at something important, yet aren't able to develop themselves because they started with nothing and are 100% focused on making ends meet? We won't find out until we give all those people a chance.
If you promise everyone money for life, many people won't bother to create wealth. Wealth creation tends to involve rocking the boat. Have you heard of Duke Nukem Forever? They had scads of money and spent years trying to make the next perfect thing and failing to release because it wasn't yet perfect. Then they would start over because they were taking so long that technology had changed and all their work was out of date. I think they finally released when they ran out of money.
A lot of people will do absolutely nothing if they have money for life. People are neurotic, perfectionistic and on and on. We do an awful lot of stuff we don't really want to do because we need the money. We don't want to starve. If we guaranteed a minimum level of comfort, a great many people will do absolutely not a thing because doing stuff is scary and hard and what if we look like fools? and on an on.
>A lot of people will do absolutely nothing if they have money for life.
Really? Citation needed.
These seem no more than unsupported assumptions based on your experience, i.e., anecdata.
My anecdata indicate the opposite. A supermajority of those I know would, but for fear of lacking minimal financial security, try to create value through entrepreneurship.
Further, my casual knowledge of basic income experimental results contradicts your assertions. For but one example, the Canadian experiment [1] [2] indicated strongly favorable effects.
Your view may depend on whether you regard people as assets or liabilities until proven otherwise. I favor the former.
[1] https://en.wikipedia.org/wiki/Mincome#Results [2] https://www.thestar.com/opinion/editorialopinion/2011/01/11/...
If you promise people they won't starve if they fail, they'll be more inclined to take wealth creating risks over safe career bets.
And? So what? Seriously, so what?
Most people agree today that not everyone is meant to go to college. So why should everyone be creating wealth? Why can't some people just be consumers?
How many important things are there? Lets go with 10,000, which I think is _extremely_ generous. Perhaps there is a better way of enabling people such that we find those 10,000 people. UBI doesn't need to be the solution.
No, the money flow for Social Security is payments that were previously made by the recipients. At least, that's how it's supposed to work. It's only because our government has raided the Social Security trust fund for decades that current payments have to be paid from tax revenues.
> How stuff gets produced isn't magic; it's much the same as today's economy.
You didn't include production anywhere in your money flow. Where does it come in?
If you're looking at non-US, or non-technology entrepreneurs, I think you'll find that this conception of an entrepreneur doesn't fit. (E.g., see this article on global entrepreneurial activity https://grasshopper.com/blog/where-do-most-entrepreneurs-com...).
Even if you're talking about non-US, tech entrepreneurs, I also think this definition falls apart. The many, many new super-wealthy tech entrepreneurs coming out of China and India grew up in a time when neither country was particularly rich.
People engage in entrepreneurship for numerous reasons, but I think it's foolish to discount the sheer number of people who do so out of financial necessity, i.e. the need to earn enough money to put food on the table and support your family.
A sibling comment pointed out the diffrence of money, but there's also a gap in the quality and quantity of opportunities to succeed.
One's a life of poverty and misery, the other is education, opportunity, social connections, etc. People can get the former already on welfare programs. Why don't we divert that 3 trillion we'd spend on BI and spend half of it in targeted ways that actually increase opportunity?
...all of this makes it weird that the biggest proponents of UBI are ultra wealthy.
Or, in terms software engineers should understand: why a complete rewrite when there's lots of low hanging bugs that we all know about?
How do you know? How many poor people have you asked?
(P.S. Don't assume that everyone who reads HN is wealthy.)
Coming from a wealthy enough background that you can fall back on your parents if you fail is a form of welfare as it allows you to take risks without it being a disaster that leaves you homeless.
Welfare serves a similar function.
Its a safety net that allows you to take risks w/o ending up starving/homeless/etc.
That assumes that the entrepreneur would have no job skills and no get-up-and-go, and so would be unable to get another job, which seems unlikely.
Can you expand on that?
No. First of all, there's no reason that basic income has to have any taxes associated with it. A common mistake people (including the government) make is to assume that government spending must be funded by taxation. It doesn't have to be.
If the government spends and the economy responds productively to that spending, then you're fine. Taxing is a separate issue. You should only really tax when you want to remove money from a specific part of the economy.
To put it succinctly, increasing taxes does not increase the amount of money the government can usefully spend unless you directly taxed the use of some resource and the spending is going to put that particular resource to use in a more desirable way.
> and lowering the supply?
Labor is a resource that goes into production just like any other resource. Depending on the context, labor can be substituted for various other resources (including foreign labor, automation, etc.).
So it's possible that some forms of labor could become more expensive under basic income. But it could just as easily go the other way. There are plenty of jobs people would love to do if only they could afford the low pay. These desirable potentially socially beneficial jobs might get cheaper.
It's hard to say exactly what the effect of basic income will be on the labor market. But, in aggregate, we do know that the economy is capable of producing at levels higher than current output levels. If we give more people the ability to spend money, we'll produce more stuff to meet the demand.
> I don't see how 1 Apple can offset 1 million unemployed, and really skeptical such a company could grow to that size/profitability under the necessary labor/tax system to support UBI.
I can understand why you're skeptical. Just keep in mind that we're currently introducing many inefficiencies into the system just as an excuse to provide people incomes through the labor market. And even then, we're still not maxing out the productive capacity of the economy.
I would encourage you to ponder what you think might happen if the government stopped trying to balance its budget and just spent as much money as the economy could absorb without causing inflation?
What amount should that be? How does the distribution of the spending affect the amount they can spend? Surely if they spent it by tossing it down a hole, there would be no limit. But there is a limit. Where does that limit come from? How do taxes factor in?
Or when you don't want your government to run a deficit. Or when you don't want to finance your government by printing money. That always ends badly, no matter how clever the mechanism is this time, or how many people say "it's different this time".
> To put it succinctly, increasing taxes does not increase the amount of money the government can usefully spend unless you directly taxed the use of some resource and the spending is going to put that particular resource to use in a more desirable way.
I don't think the economy works the way you think it works...
> Or when you don't want your government to run a deficit.
Why wouldn't you want to run a deficit? What do you feel is the downside? Are there times when it's appropriate to run a deficit and times when it's not? Which times are which and how do you tell the difference?
I have my own answers to these questions. But I'm asking for your opinion.
> Or when you don't want to finance your government by printing money.
What do you feel the difference is between deficit spending and printing money?
> That always ends badly, no matter how clever the mechanism is this time, or how many people say "it's different this time".
Does it? Why do you suppose it is that many developed nations are running budget deficits? Do you feel that this is a mistake? What do you think would happen if all governments balanced their budgets?
Again, I have my own answers to these questions and I'm looking for your opinion.
> I don't think the economy works the way you think it works...
How do you think it works?
The point is you can finance your government by just printing money. If the value of your expenditure raises the wealth of the nation by the same amount, there will be no inflation.
Though I would say it's just a hidden wealth tax.
Regarding the labor substitution:
a) Would you agree productivity per labor hour must go up under UBI to be successful? Sam believes this will come through automation / AI.
b) Actual labor hours will go down and wages up, due to decreased incentives to work.
Unless A outpaces B, productivity will decline. If it does outpace B, wages or taxes must capture all of the increase or inequality rises quickly as fewer "working" people are capturing the rewards. These wage/tax increases will then slow the growth.
I guess I don't see how UBI wouldn't decrease the labor participation rate, and then how a low participation rate economy would grow faster than a high rate one.
>Would you agree productivity per labor hour must go up under UBI to be successful?
No - the slack could come out of corporate/executive profit/compensation instead.
No. Keep in mind that labor is just one among many resources that we use in production. Our economy has a lot more resources (including labor) at its disposal than we're currently making the best use of. A successful basic income just gets the economy producing closer to its capacity by giving people more spending power to buy things.
I don't think that labor productivity is a super useful measure of economic performance. That being said, basic income would almost certainly increase labor productivity. That's because labor productivity is just a calculation of how much stuff we produced divided by the amount of labor we used. If the amount of stuff we're producing increases and the amount of labor we're using stays the same or decreases, then that's an increase in labor productivity.
I suppose you could imagine a scenario in which we have a basic income a lot more people are working. If the amount of additional labor we're using outstrips the amount of additional wealth that we're producing, it would be a decrease in labor productivity. But I think that's very unlikely to happen. And that's because the proportion of excess productive capacity in the economy is probably vastly greater than the proportion of labor we'll ever be able to activate.
Even if we had every man, woman and child working double time, we'd still probably see an increase in labor productivity under a basic income.
> Sam believes this will come through automation / AI.
It's true that technological advances increase our economy's productive capacity. But that's very different from saying that technology automatically increases our actual production levels, or our labor productivity.
In other words technological advancement allows us to produce more, but that increase in production doesn't happen on its own. We won't produce stuff unless people will buy the stuff. So automation and AI will only increase production levels (and therefore labor productivity) if there's someway to fund spending on products. That's where basic income comes in. Basic income allows people to buy things. Then that causes us to make the things for them to buy.
An interesting characteristic of the labor market is that it's generally where we expect people to get their incomes from. Technology allows resource utilization to be more efficient. Labor is no exception. So, on their own, technological advancements mean less money going toward labor, which leads to lower incomes, and hence lower levels of production.
Historically, we've come up with various ways to boost people's incomes to compensate. The biggest one is probably stimulating the private financial sector so people and firms can more easily borrow in order to spend. The firms, in turn, create jobs with that borrowed money and this distributes income to people. Basic income is a way to achieve a similar effect, but in a more stable way that doesn't create asset bubbles in the private financial sector.
Basic income can also get you further. There are only so many projects worth investing in and only so many jobs worth hiring people to do. Without a basic income, we have lots of people working at jobs that don't really contribute to the productive economy and labor productivity plummets.
> Actual labor hours will go down and wages up, due to decreased incentives to work.
It really depends. There are plenty of jobs that people would love to do, but they can't afford the low wages. Basic income would open up that possibility for people. So for those particular jobs, the wages would likely decrease. Furthermore, more people would be free to volunteer as well.
It also depends on what you count as labor. Does volunteer work count as labor? What about interning? How do you tell the difference between a hobby and volunteer work?
Certainly there are some undesirable jobs that basic income will give people the freedom to say no to. In order to get people to continue to work those jobs, you'd have to increase the wages or make that work desirable in some other way. Perhaps the costs are too high for the employer, so they decide to substitute some other resource for that labor. But is any of that a problem?
> Unless A outpaces B, productivity will decline.
Hmm. Are you calculating productivity per dollar spent on labor or productivity per hour spent on labor? I think we normally think of labor productivity as the amount of production per hour of labor.
> If it does outpace B, wages or taxes must capture all of the increase or inequality rises quickly as fewer "working" people are capturing the rewards. These wage/tax increases will then slow the growth.
I'm not following you here. Assuming that we're running an output gap (i.e. not using all the productive resources we could be using), basic income causes our economy to produce more. Its effects on wages would be complicated. Taxes are kind of separate issue.
Basic income doesn't do anything to directly address inequality, but it raises the income floor. If even the poorest among us is rich, will inequality be that big of a problem? Maybe it will still be a problem that we have to address. I don't know. But if inequality does end up being a problem, that's a separate issue and we can address separately from the problems that basic income addresses.
> I guess I don't see how UBI wouldn't decrease the labor participation rate
It could go either way. And part of it might depend on what we define as labor. If there's no minimum wage, for example, where do you draw the line between hobbies and labor? How much pay counts as a job? What does it mean to be self-employed? Does there have to be some kind of formal labor contract in place? Does any of this matter for determining the prosperity of our society?
> and then how a low participation rate economy would grow faster than a high rate one.
Economic growth isn't constrained by the amount of labor being contributed. It's constrained by the amount of spending in the economy. If labor were our limiting factor then less labor would mean less production, as you say. And at least in the developed world, except maybe in certain special cases (e.g. wartime), that hasn't been true for decades if not centuries.
Neither labor nor government is the source of all wealth. There is no one source of all wealth. Not all wealth is produced in the economy, but for the wealth that is, the source of that wealth is all of the resources (including labor) that collectively go into the production of that wealth.
Furthermore, we wouldn't produce wealth if people weren't able to buy it. So in a sense, you could say that the source of wealth is spending. And in the sense that the government funds spending (through a basic income or otherwise), the government is the source of wealth.
Depending on your perspective, wealth can have different sources. But figuring out the source of wealth isn't really that important when we know how to maximize people's wealth regardless of its theoretical source.
There's a lecture I really like by economist Steve Keen where he describes his own theory for the source of wealth:
https://www.youtube.com/watch?v=2H1LIr2NMbE
His answer is that energy (a.k.a. the sun) is the source of all wealth. That's certainly a reasonable way of looking at it that you can't really argue with. But it doesn't tell us how to improve human prosperity.
My favorite quote from the lecture:
"The theory of production has got nothing to do with the theory of remuneration."
Basically this means that how much you get paid has very little if anything to do with how much you contribute. And that's exactly the way it's supposed to be. Markets determine the prices of various forms of labor and that's fine. Let supply meet demand and don't worry about whether wages happen to line up with individual incomes that are optimal for the economy.
Getting individual incomes to prosperity-maximizing levels what basic income is for.
Labor can only add value.
Government can only take value away.
If what government takes is significant, the amount must be bearable relative to the remaining resources and productivity of the labor, or collapse will be inevitable.
A benevolent government is sustainable.
A greedy or destructive government is not sustainable, even though the resulting collapse may be beyond any person's or institution's living time frame or vision. This can be exploited by design.
The currency you're trying to build is based on that model, and I just can't agree with it.
You do have intriguing points but I think we're coming at the issue from a far divide.
(As for your request for proof by claimed authority, I used to live in the Bay Area. It's been about ten years since I left. I was doing fine on $60k back then. Maybe prices have doubled in the meantime.)
probably not if
"tax the hell out of wealth"
... right?
The problem with taxing the wealthy, is that they generally have an outsized share of the political power. I think that a better solution, from a political and psychological standpoint, would involve a voluntary system. If just rent could be covered, this would be the equivalent of $12k per year in many parts of the US:
http://www.elledecor.com/life-culture/news/a7635/german-vill...
That German gated community you linked has housing that is owned by a trust. I don't think you can ask residents of the U.S. to voluntarily hand over all their housing property to a trust, or require them to be Catholic to reside in it.
However, I think it could be possible to have many, many such trusts which cater to specific interest groups. How about communities which cater to different kinds of artists, musicians, writers, philosophers, etc...? If something like 60% of the US population could be covered this way, it would combine many of the best aspects of universal coverage with the benefits of meritocracy and the advantages of a voluntary basis.
By voluntary system you mean the wealthy voluntarily turning over the wealth that they won't let us tax them for? It doesn't make sense.
Many other cultures have a gift economy, where the powerful voluntarily redistribute their wealth in exchange for status. Culture is very powerful, often overpowering pure economics. Warren Buffet and Bill Gates have already pledged huge fractions of their wealth towards the common good. On the other hand, the historical record on politically forcing the wealthy to hand over their wealth also supports the notion of voluntarism. It's the society and culture which are the overarching influences. If we changed the culture such that trusts supporting intentional communities were the way the wealthy could have a meaningful impact and legacy, then we could conceivably house over half of the US in virtually free housing.
Arguably, living, thriving creative communities would be far more meaningful than plaques in a museum, park benches, and buildings on a college campus. (Colleges are over-funded and in a bubble as it is.)
No, to tax rich people you have to seize the damn money.
People who fund raise for non-profits convince the wealthy to part with their wealth all the time. If we changed society to make this the way to have a legacy as a rich person, then it would happen. Cultures around the world have convinced their wealthy and powerful to do far wackier things than endow an intentional community.
History shows us that the crazy thing to do is to try and force very smart people with lots of resources and power to do something they find distasteful. The same thing to do is to change how people think, feel, and behave, using historical models as precedents.
Now of course they do everything they can to avoid taxes, but very few evade them. I'm not so wealthy, but if I can legally avoid paying a tax, I will. That's more available for my retirement, charitable causes, and my family. I don't expect more from the wealthy than I do of myself.
Even if you did manage to tax all the wealth without destroying it, it'd only provide 10 or 20 years of basic income. Which is a lot, but it is hardly enough to make or break a BI as long term policy.
Easy to say when it's not your wealth being taxed.
The difference is whether the government borrows money, or simply creates it. (And yes, I am aware that borrowing money can create money, via the magic of fractional reserve banking.) When the government borrows the money, they have to pay it back, or at least pay interest on it. This puts some constraint on the government. Whereas if the government creates the money, there is no constraint - it can spend as much money as it wants. If you don't see why that might be a problem, let me ask you: Have you looked at Congress lately?
But if the government is using the money to create things of value to the society, what's the problem? That's a reasonable position - if the government is doing so. And for some government spending, that's true. But for a fair amount of it, no, it is not invested in creating things of value to society, and so no, society does not get a return from it.
Take the military, for example. It keeps other nations from destroying things of value to our society, but it doesn't create any value. (It creates jobs, and profits, but not anything of productive value.) And that means that it's a drain on society - the people who are in the service, or creating weapons, could be doing something else of more value to society - teaching children, or repairing roads and bridges, or building a better air traffic control system.
So if Congress can create money, it can divert as much of the actual productive ability of the economy - people and materials - to whatever Congress thinks will get more votes. Again, I say, look at Congress. Do you really want to give them the ability to steer unlimited amounts of the economy to do whatever they think should be done? I don't. It's a horrible idea.
I was going to answer more of your questions, but this is already long enough.
Sort of. Each individual debt obligation has to be repaid as it comes due, but that's different from saying that total volume of debt ever needs to be paid down. The government can be meeting its debt obligations while at the same time increasing the total amount of debt. As long as there's a market for government debt, they can continue to roll over their debt.
They have to pay interest too, but this isn't exactly a problem. They can always borrow to pay the interest. And if treasury yields get too high, the Fed can buy up excess government debt. Then one part of the government is just paying interest to another part of the government anyway.
> This puts some constraint on the government. Whereas if the government creates the money, there is no constraint - it can spend as much money as it wants.
The borrowing is creating money. You can deficit spend without the bookkeeping of issuing treasury securities etc., but the result is the similar. The ultimate constraint is still the amount of spending that the economy can productively absorb.
> If you don't see why that might be a problem, let me ask you: Have you looked at Congress lately?
Sure. If Congress doesn't understand how deficits work and you can trick them into creating money without explicitly borrowing (even though you're technically still borrowing), then great. But that's politics, not economics.
> But for a fair amount of it, no, it is not invested in creating things of value to society, and so no, society does not get a return from it.
Correct. If the government spends money in a way that burns resources, it takes those resources away from the productive economy. But if the government spends money in a way that doesn't help, but doesn't hurt either, they can spend unlimited amounts of it without really changing the constraints on how much additional money they can spend. For example, if they printed money and spent it by tossing it down a hole, they could do it for as long as they wanted without hurting anyone, but without helping anyone either.
> And that means that it's a drain on society - the people who are in the service, or creating weapons, could be doing something else of more value to society - teaching children, or repairing roads and bridges, or building a better air traffic control system.
Yup. If labor is scarce and you're making people work on things that are not benefiting society, then you're taking a valuable resource (labor) away from the productive economy. I don't think we're particularly short on labor right now, but the same type of reasoning applies to any resource.
> So if Congress can create money, it can divert as much of the actual productive ability of the economy - people and materials - to whatever Congress thinks will get more votes. Again, I say, look at Congress. Do you really want to give them the ability to steer unlimited amounts of the economy to do whatever they think should be done? I don't. It's a horrible idea.
They already have that ability. I want them to use it to provide a basic income. Maybe that means making basic income more popular so it becomes one of the things that gets them votes.
I think I'd be alright with UBI not being a long term policy if it meant radical wealth redistribution.
Sure. An artist commune shouldn't be letting you in unless you actually have some skill and artistic talent.
Meritocracies reward meritorious individuals, which is difficult to do when forcing everyone to live in communal housing. This isn't very well thought out.
You didn't try and prove the null hypothesis very hard, did you? There already exist intentional communities and artist colonies, where some degree of skill (merit) is a requirement. This is analogous to the German trust cited above, except the Catholicism requirement is replaced by some sort of merit-based interest.
Schemes to tax the rich and powerful only succeed with the participation of the rich and powerful. That is what you are also saying, but your view is distorted because you are othering "the rich."
> I don't expect more from the wealthy than I do of myself.
When you're not wealthy, you have strong needs for that extra money. So I definitely do expect more from the wealthy, in terms of dollar amount. In terms of impact on their life I'm asking for very little.
To force them, out of resentment, as if they are immoral villains or monsters. Do you take well to being treated as an immoral villain?
I wouldn't hold my breath.
This is exactly how successful museums operate. What would be so outlandish about changing the culture, such that intentional community trusts become the prominent way of showing a legacy? Hell, we already are basically doing this for wildlife. Why not do this for human beings?
Treating them as immoral villains and trying to take their wealth away will just make them hold onto it that much tighter. I'm just upper middle, but I feel the strain knowing CA is constantly trying to raise my taxes to cover increasing deficits / unfunded pensions.
And I don't think that's a false statement either.
We used to exist in a culture where women had no options outside of the home and black people were slaves.
Hand waving about voluntarism and a culture shift isn't going to fix anything. Tax the shit out of the rich and make them pay for it.
In order to tax the rich heavily, you still need a culture shift here in the US. Wherever such taxation works, there is already a thread of communal culture. In order to achieve the same in the US, you need a cultural shift, and not setting up to do that work and simply saying "tax the shit out of the rich" is the hand waving. You're using a slogan that exploits resentment, not setting up for real change.
In this regard a large tax greatly reduces purchasing power and makes it less worth the trouble.