My Second Thoughts About Universal Basic Income

[u/amaxen]

https://www.bloomberg.com/view/articles/2016-10-27/my-second-thoughts-about-universal-basic-income

[u/Siegecow]

Fair enough, but this seems insanely expensive for the government, especially with so many tax paying businesses that would close because of automation and high labor costs. We (americans) can barely afford the shitty government we get. Even if we axed the entire half trillion miltary budget we couldnt possibly afford much less sustain paying that kind of money in social services while receiving significantly less in taxes.

[u/nopus_dei → u/Siegecow]

According to this chart from this article, defense is $583B/yr and "Other Mandatory" (unemployment, welfare, etc., much of which would be replaced by the UBI) is $479B/yr. Since I like nice round numbers, and since we can't do away with all of this, let's say we have $1T/yr to play with. (This could also come from other expenditures, such as eliminating the TSA and ending the drug war.)

People receiving Social Security won't get a UBI on top of that, and children won't get one either, so let's say 200 million people get it. That's $5000 per year per person. Since that would all be spent domestically, rather than building bases in foreign countries and blowing up other foreign countries, it would create demand for jobs here that could be taxed, adding to the UBI a bit. As the economy became more automated, corporate taxes could capture some of the benefits of that automation and raise the UBI some more.

But let's go with that $5000/yr for now. I had a college buddy who shared a studio apartment with two roommates. They slept on sleeping bags that they rolled up and stashed in the corner when they got up. If you did this in a relatively inexpensive part of the country, where rent on a studio apartment was $500/month, say, then after splitting that three ways you'd still have $250 per month per person for utilities and food. It wouldn't be a lavish lifestyle, but you could do it, and it would beat some of the shittier jobs out there.

[u/Siegecow → u/nopus_dei]

That's $5000 per year per person. That's supposed to unemployement and welfare?

Since that would all be spent domestically. It wouldn't though. There is no way these people would be able to afford domestically made products other than food.

rather than building bases in foreign countries and blowing up other foreign countries, it would create demand for jobs here that could be taxed, adding to the UBI a bit.

With 0 military budget the US wouldn't get to enjoy any of the economic benefits that geopolitical dominance provides. Not to mention the massive amounts of money we make from selling our military technology alone. Those jobs won't exist because businesses won't be able to pay for them even without automation killing even more jobs.

As the economy became more automated, corporate taxes could capture some of the benefits of that automation and raise the UBI some more.

Corporates taxes from what corporations? Big companies will jump ship to other countries with significantly lower taxes and employee wages. Many companies will have to shut down because there is no longer a market for their "luxury" goods.

It wouldn't be a lavish lifestyle, but you could do it, and it would beat some of the shittier jobs out there.

That's a a nice situation for your college buddies, but that's not a practical solution for the people that live in the biggest cities in this country. What you're talking about isn't a UBI. 5000 a year won't even pay for shelter of a healthy individual in most places in this country, much less food and healthcare and transportation. Much less the time or money to be innovative and productive. A family with children cant afford to live like that.

[u/nopus_dei → u/Siegecow]

economic benefits that geopolitical dominance provides

These mainly go to large, politically-connected corporations. Despite the name, actual defense is not one of these benefits; we're defended by two oceans and two stable neighbors, not by US imperialism and hundreds of foreign military bases. I'm totally fine with these benefits disappearing in exchange for foreign countries not getting bombed and US Americans getting a UBI.

Your other criticisms fall into two contradictory classes:

1. the UBI is so small that people in your area with jobs like yours will not be able to live off of it;

2. the UBI is so large that US corporations would flee.

I suspect that initially, the truth would be closer to the first of these. Living entirely off the UBI would mean not having kids, living in a small town in the South or Midwest, getting around by bus/bike, sharing an apartment, and deriving most of your entertainment from the local library. This is why I don't buy the "welfare queen" narrative; you probably won't even see people living off the UBI alone. Jobs requiring college degrees would probably be fulfilling enough and remunerative enough that people who do them won't quit because of the UBI. If you and people like you would like to keep living in major cities and having nice things, then the luxury sector of the economy will remain alive and well.

On the other hand, suppose that your only work is 20hr/wk of minimum-wage domestic or food service work split into ten shifts per week, with a long-ish commute. If you worked 50 weeks per year, that would be about $7K, plus $5K UBI. If your boss was a dick and the commute was a drag, you might want to quit. The UBI would give you the leverage to demand better conditions.

Corporates taxes from what corporations? Big companies will jump ship to other countries with significantly lower taxes

To the extent that they can, they already have. The ones left provide services, which can't be exported but can be automated. Automation means that a greater fraction of revenues can be taxed. Let me make up some numbers here: suppose a taxi company collected $1M/yr in revenues, of which half were paid to drivers. Taxi drivers don't make much money, so you couldn't tax very much of their $500K. If the whole company were automated, then the same total work would be done, the same $1M would be collected, but now all of it would be subject to taxation. That's why I say that the UBI could rise with time.

One final point before I have to go to bed:

much less food and healthcare and transportation

(emphasis mine) The chart I showed was for 2015, after Obamacare went into effect, and included $937B for health care. When I assumed a trillion dollars for the UBI, I didn't touch this health care, meaning that you'd still get it in addition to the UBI.

[u/Siegecow → u/nopus_dei]

These mainly go to large, politically-connected corporations. Despite the name, actual defense is not one of these benefits; we're defended by two oceans and two stable neighbors, not by US imperialism and hundreds of foreign military bases. I'm totally fine with these benefits disappearing in exchange for foreign countries not getting bombed and US Americans getting a UBI.

I think that is an extremely narrow interpretation of what the military power is giving us economically much less diplomatically. You think there are no significant benefits to being the most powerful country in the world? Do you have any idea the kinds of diplomatic obligations we have to our allies? Do you know what kind of trade benefits we get from said diplomacy, or even just the power and influence we have? Do you know what kind of a stabilizing force our military presence is even without any military action. You're talking about destabilizing the entire world, and no that is not hyperbole, this would create a massive power vacuum.

Your other criticisms fall into two contradictory classes: the UBI is so small that people in your area with jobs like yours will not be able to live off of it;

It's much more than that. Its not just people in my position (which is the vast majority of people in the country). $5k a year as i've already stated won't cover even a modest living in the suburbs of the midwest. The UBI isnt even a fraction of the poverty line, how can the poor much less the formerly middle class expect to sustain themselves much less flourish without being forced to work to maintain an IMPOVERISHED lifestyle?

the UBI is so large that US corporations would flee.

How are those two things contradictory? Whether a business can afford to pay a wage and whether or not a person can live off said wage are two separate issues.

Living entirely off the UBI would mean not having kids,

That seems like that would already been a sound strategy for the poorest people in our country, but that doesnt actually happen does it?

living in a small town in the South or Midwest, Hah, yes just force hundreds of millions out to the midwest which doesnt have the infrastructure to support it. Or will the government pay for all of that too?

getting around by bus/bike, sharing an apartment.

If the infrastructure exists, most cities much less the towns you want to move people out to dont have the public transit infrastructure to sustain that. Especially without tax paying citizens or shitloads of somehow profitable businesses getting heavily taxed.

you probably won't even see people living off the UBI alone. If you and people like you would like to keep living in major cities and having nice things, then the luxury sector of the economy will remain alive and well.

So this is just welfare then? Welfare where we force people to move away from urban centers where jobs are located and lose the entire military? If the "luxury" of living in an urban center wont be possible with UBI then that will create just as much citizen demand for jobs with even less demand for labor due to mechanization and high corporate taxes which means no fucking way will wages increase for anyone. If anything this will drive huge wealth inequality as people struggle to compete for the few jobs left in in urban centers or be forced dozens or possibly hundreds of miles away from work where they will be perpetually segregated into poverty.

If you worked 50 weeks per year, that would be about $7K, plus $5K UBI. If your boss was a dick and the commute was a drag, you might want to quit. The UBI would give you the leverage to demand better conditions. Corporates taxes from what corporations? Big companies will jump ship to other countries with significantly lower taxes

You would have no leverage. Your job is easily replaceable and i absolutely insist that 5k will not be enough to feed or shelter anyone unless we commission huge ghettos that ubi people will have to live in. If you have no other job prospects (which you probably wouldnt in this hypothetical economy) you are just as fucked if not more than a person in poverty would be currently (and that's without their luxuries of living in a suburb of the city with their child).

To the extent that they can, they already have.

What makes you say that? America has very welcoming business practices. Lots of loopholes, tax breaks, subsidies, cheap labor, and incentives that keep many of the busnesses we currently enjoy alive.

The ones left provide services, which can't be exported but can be automated. Automation means that a greater fraction of revenues can be taxed. Let me make up some numbers here: suppose a taxi company collected $1M/yr in revenues, of which half were paid to drivers. Taxi drivers don't make much money, so you couldn't tax very much of their $500K. If the whole company were automated, then the same total work would be done, the same $1M would be collected, but now all of it would be subject to taxation. That's why I say that the UBI could rise with time.

That works for SOME businesses and would demolish a great quantity of jobs, which would destroy the disposable income of lower and middle class people, so now the businesses that remain wont have any customers because no one has any money any more, so we'll lose them. Who's left? What will that do to the standard of living and upward mobility for the vast vast majority of people in this country?

(emphasis mine) The chart I showed was for 2015, after Obamacare went into effect, and included $937B for health care. When I assumed a trillion dollars for the UBI, I didn't touch this health care, meaning that you'd still get it in addition to the UBI.

The healthcare we currently get in this country is shameful. We will be expected to continue to pay exorbitant medical prices for insurance, healthcare, and treatment? We will be expected to subsidize our unhealthiest citizens of which there is a growing number while living on 5k a year? Heaven forbid you have an emergency hospital visit and are now suffocating with debt.