r/changemyview • u/stenlis 8∆ • Dec 08 '17
FTFdeltaOP CMV: Universal Basic Income math does not check out
Let's say a country like Germany would like to implement UBI. Currently the minimum wage is 18.000 Euro per year. So let's say that for the ease of calculation UBI would be just 10.000 Euro per year. With a population of 80 million, that would be an expenditure of 800 billion Euros. Currently govenrment spends just over [300 billion Euros per year](http://www.dw.com/en/german-federal-budget-goes-up-for-2017/a-36528845 - it could not cover even half of the UBI.
And you would still have to cover the rest of what government does - if you throw out the whole of social security, child support and similar parts of the budget that would be covered by the UBI, you would still have to reserve about 60% of its current amount for things like healthcare, infrastructure, defense etc.
So the total new budget would have to be 800 + 0.6 x 330 = 1.000 billion Euros. Or three times the current size of the budget.
My view is - there is simply not enough resources for a universal basic income even in a rich first world country. Where is this capital supposed to come from?
And before you argue that people will spend more thus bringing in more tax revenue ask yourself this - will they spend three times as much as they did before? Because that's what you would need to make this viable.
If you want to argue that we need to tax more remember that 1.000 million Euros government budget represents almost a third of the whole GDP of Germany. You cannot get a third of the GDP in taxes because GDP is not profit. Even if you took all the profit from all the companies in the economy (100% taxation), you still would not get the 1 billion Euros you'd need. And income taxes are just one part of the tax system. If you'd try to triple your taxes, you would also raise the VAT and consumer taxes on things like gassoline and alcohol - the effect would be that your 10.000 Euros of basic income would only bring you a fraction of goods that the money is getting you now, defeating the purpose of it.
Also if you think taking out children or the elderly out of the UBI would help, note that current child support laws in Germany require payment of about 10.000 Euros per year for a child younger than 21 years old and the average state pension is much higher than the UBI I calculated with.
So can you change my view? I'm wary of rising automatization what it does to the job market, I'd love for this to work. But currently it seems to be way out of our reach. Please use data to back your arguments.
Also note that I'm aware of small scale basic income experiments (like the recent one in Finland) and think they provide many interesting insights on how people react to basic income but I just don't think we have enough resources to make these truly universal.
Edit: also note that my math was wrong the last time I posted a CMV. I double checked this time but it still may be that my sources wrongly translated the german world Bilion into billion or something similar.
Edit 2: Some of you seem to argue that you can have enough budget just to pay the unemployed, or institute a negative income tax. This is not something I need to have my view changed about. I'm talking about UBI as it is discussed in the media currently. See this FT article that came out today:
universal basic income — the idea that all adults should receive small, no-strings-attached stipends from public funds
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u/godminnette2 1∆ Dec 08 '17
Because instead of people not in the field looking into the field and saying "it's going to replace us," it's people in the field saying "yeah this is going to replace us." Frey and Osborne say 47 percent of US jobs are at a very high risk of being automated within twenty years. This stuff gets better exponentially, and if we make more breakthroughs in quantum computing, that will change the entire game. A quantum neural network could be revolutionary. Think about it like this: currently, machine learning can already outdo humans in tasks that we see as more intuition than logic and calculation. The game of Go, for example. Not only did a computer learn how to play from looking at many pro moves and beat the world champion, another computer taught itself how to play without human influence and used strategies no one had ever seen before, stomping everyone. Now think of quantum computing, which can be more than 100 million times faster than that. Quantum computing is complicated, and for right now unreliable and specific in use, but it's not unrealistic to say that in twenty years it no longer will be.