I think the idea here is that UBI replaces all of the other government welfare programs, no?
What happens when someone spends all their UBI on whiskey or oxy and consumes it all and is then hungry? Should we keep food stamps around? Why can't we do that part (universal food stamps) by itself?
I don't think the all-or-nothing approach of UBI makes a ton of sense. We can do things today like more free or subsidized food that would work exactly the same way as it would under UBI, with potentially more buy-in.
> What happens when someone spends all their UBI on whiskey or oxy and consumes it all and is then hungry?
What's the difference between that and the current reality? Food stamps can be sold and bought on the black market in exchange for drugs and alcohol; people who want whiskey will be able to get it. Whatever money is spent on enforcing the "sanctity" of food stamps could just go to more people directly.
And this is really the main point: the administrative burden all of these social programs incur, especially in terms of labor and office space, means that a very large sum of money is going into these programs that will never be seen by the people who need help. Just give everyone a check and be done with it.
To answer your main question: the person who blows their UBI suffers. They will be hungry for the rest of the month, and not many people will have sympathy for them because they already got their check. All mentally sane people realize this reality, and that is enough to prevent them from spending their UBI poorly. For the minority of people who are sadly physically addicted to drugs, there can be social programs specifically aimed at recovery and rehabilitation. This was another one of Yang's policies. UBI would help here too: let's say you spend 8 months at a government funded rehab facility while you kick your addiction to meth or heroine. At the end of the 8 months, you have $8000 waiting for you - to go forward, get a job, rent an apartment, and rebuild your life.
This is much cheaper than a bloated social program that ties your aid to measurable checkpoints, like how you have to prove you're looking for a job in order to keep receiving unemployment. Under UBI, the Fed just runs some script every month to raise a double somewhere by $1000; under unemployment they have to hire people to process your application, approve/deny it, review your weekly application submissions, hire someone else to distribute the money, hire a manager for all these people, pay an office to give these people a workplace, pay pensions and benefits for all these employees, etc.
If that’s the core argument for UBI i.e. it’s far more efficient, why do such proposed initiatives come with significant tax increases on the population? Your analysis should theoretically support a net decrease in spending on welfare (hence lower taxes) or best case, no additional increase. You would have a lot broader support if UBI wasn’t tied to egregious tax proposals like a wealth tax.
> If that’s the core argument for UBI i.e. it’s far more efficient, why do such proposed initiatives come with significant tax increases on the population?
This is really just a framing issue.
The way existing programs work, you get $12,000 in food stamps and housing assistance and student loan interest subsidies etc., and then they phase out at higher incomes.
With a UBI, everybody gets it, unconditionally. The "phase out" is taxes. You get $12,000, but by the time you've made e.g. $60,000/year in income, you've paid $12,000 in taxes to fund the UBI, and it cancels out. Opponents paint this as you've paid $12,000 more in taxes, but really it nets to zero. Meanwhile the person making $80,000 might "pay $16,000" in taxes, but it's really only $4000 because they still get the $12,000 UBI.
It's the same as having $12,000 in benefits which phase out below your income level, except that the accounting is much clearer so that you can easily see what the true marginal rates everyone is paying are, and you can't accidentally create ridiculous marginal rate cliffs by having independent programs phase out in the same place.
I’d guess that’s where the 5 million from Dorsey comes in. Figure the dollar amounts for replacing certain services. (I didn’t read the article, appologies If I’m way off.)
> why do such proposed initiatives come with significant tax increases on the population?
This depends on your definition of "population." If you consider billion dollar multinationals as part of the population, then yes, there are significant tax increases. You mention a wealth tax - first off, that's not a Yang policy, and I'm not aware of any prominent politicians pushing a wealth tax and UBI at the same time. However even if we consider Elizabeth Warren's wealth tax, that only kicks in once you start making over $50M / year, and there just aren't many people doing that. Is it really a significant increase if it only targets a few thousand people out of 330 million?
> Your analysis should theoretically support a net decrease in spending on welfare
Not exactly. It supports a net decrease in spending on welfare administration. Plenty of people, especially those leaning right-wing / libertarian / "small government", absolutely loathe the idea of useless government jobs, even though they would agree with purpose of the program (i.e. feeding the homeless, paying out unemployment, taking care of the elderly, etc.)
Even though spending would go up (although not really on the individual level, as AnthonyMouse points out), the political popularity of UBI would far surpass that of any individual social program, ensuring that it stays around for a long time and remains untampered. We are finding out how critical this is now, where states like New Jersey ended up having garbage unemployment programs due to ineffective management and states like Florida purposefully made applying for unemployment as difficult as possible to dissuade people from trying (to make their labor force numbers look better). The only social programs that have this "legendary" reputation among the public that protects them appear to be Social Security and Medicare: nobody can run and win on a platform aimed at destructing either. Destructing UBI would also be very difficult: people tend to get very angry when you promise to pay them, and then don't!
> "What happens when someone spends all their UBI"
I think that's the most important question.
I believe the story is that one will abuse whatever welfare they get. Whether it's stamps, credits, services or money.
Here in Australia they've been trialing a cashless debit card to control what people spend their welfare money on. Somehow, it's still costing _more_ than just giving people money and the recipients aren't happier either. Some are using the card to buy things like batteries and re-selling them to then buy their drugs and alcohol. So there's money spent to restrict the money, but the money is still abused. So why not just give them the money?
In the end - money is money. Poverty is literally only solved with money. Surprisingly, the cheapest and easiest way to solve someone's poverty is to just give them money. If they abuse it? Fine. They were going to do that anyway.
That's a big statement, with a lot of evidence against it. I recall an experiment where a homeless man was given $100,000, and was back on the streets in no time.
The idea that you "solve problems with money" seems to be an American disease. That we just haven't pumped enough money into the machine to make it work.
Homelessness and poverty are big, complex problems. Money is likely part of the solution, but so is education, and we aren't going to fix that with Yet More Money -- seriously, the US spends an insane amount on education to receive incredibly poor results.
> Surprisingly, the cheapest and easiest way to solve someone's poverty is to just give them money. If they abuse it? Fine. They were going to do that anyway.
I agree with you there. All the efforts to curb "abuse" have been an absolute waste of time.
The psychology of a large one time payment versus a passive, smaller one is absolutely immense and should not be equated. Native tribes have oftentimes given their youth large payments that get spent on expensive consumer goods that wind up back in pawn shops, but UBI experiments in Kenya and in low income areas around the world have shown dramatically different results with the hallmarks of upward mobility presenting (risk taking, lower stress, future orientation, etc.). Lottery wins are nothing like a permanent trust fund that pays out if you stay out of jail like in Yang’s UBI.
I read somewhere around 80%+ take the lump sum about 12 years ago. Given the risks of inflation over 25+ years it isn’t a bad idea. Most lottery winners get accosted by family members or spend like crazy with their money and wind up broke in the end. However, a great deal of them do at least take care of their health at least (getting teeth fixed was common). A mental trap of scarcity makes it difficult for the perpetually poor to think of money as nothing more than something to be spent rather than invested, but even here the HGTV dream home winner around 2007 sold the house to create... a construction company, which went bankrupt quickly.
Financial literacy can be taught over time though similar to helping people diet and control portions.
So what if someone spends it all on whiskey or oxy? They're maximising their own preferences. If they were addicted to alcohol, sudden withdrawal can kill.
One of the big reasons for UBI is the belief that an individual can better assess their own needs and wants, and procure them more cheaply than the government.
This is partly a moral/philosphical stand - the tension is between giving individual freedom in the form of money, or giving freedom via paternalistic methods where the government decides what is best for you. It can be argued either way.
I do agree it would be wise to have systems in place to trickle the money in daily instead of monthly - this would help your concern of people blowing all their money at once (but not prevent them spending on what was most important to them).
I also think that just UBI will never be enough - there is a place for targeted government support - healthcare, addiction (part of healthcare), mental health (also part of healthcare).
I agree very strongly with you, but I don't think that's where the parent poster was going.
Imagine we have a UBI, and we do all kinds of other smart things -- end the War on Drugs, establish Bismarck-style national healthcare[1], all that.
Let's do a thought experiment.
What happens when Alice blows all of her UBI on Lady Lee Vodka and Oxy. Nothing left for rent, food, the rest. Nobody else in the picture to help: no relatives, nada.
If we look at UBI as the only social assistance program, Alice dies on the street.
That's the reality, and we need to accept that.
Alternatively, we would need some sort of "backup" reserved for people that are not capable of caring for themselves.
Maybe something like restarting the mental hospitals that Reagan closed in the 80's after Geraldo -- and the rest of Our Friends In The News -- ran wild with the scandal of how awful those government-run mental hospitals were, with the end result being that a bunch of mentally ill folks got chucked out on the street.
Now, I don't know what the answer is. I really don't.
My concern is that I see a lot of people talking up only the benefits, and not in any way addressing the failure cases.
[1] Yields better results than single-payer, and is better at controlling costs.
I actually agree with both you and the parent poster - this is a real problem.
My position would be that you still need assistance programs as well as the UBI for people like the above, but I'd treat it as a health issue rather than a poverty issue.
I think this is where you really do need a paternalistic government for people who need the guidance, but it should be the exception, not the rule. Let's respect peoples choices for themselves and only step in if necessary.
I'd argue that Alice is either addicted or mentally ill, and supported living facilities or similar would be the way to go. She would still be entitled to her UBI, which would be her route out of the system once she no longer needs to spend it on drugs.
So I'd say that UBI will never completely replace all government programs, but it should be the default and go a long way to reducing the need for existing programs.
If I were implementing it, I'd start with a low amount (well below the cost of living) and increase it over time. I'd leave the current support programs in place. The current programs are means tested anyway, so the hope would be that as UBI increases, use of the current programs would reduce, and we would have time to reorganise them as needed.
This would also give us a chance to measure the effects and get real world data as to the impacts on society and government incoming/spending.
I guess the real question would be how much it would all cost. My gut feeling is that short term it would decrease productivity as people wouldn't feel the need to work so hard, but long term it would increase productivity as people will be able to invest more in themselves.
Alice could get a job and then lose it all on vodka and oxy. I don’t see why UBI needs to ensure that she doesn’t do foolish things with her money.
People are going to make bad decisions, unfortunately. You can’t live in a free society if you don’t let people make unfortunate, bad decisions that harm themselves.
If you think all people should be protected from their bad decisions then you’re basically sliding straight down the slope into totalitarianism.
In a free society, some people will make bad decisions and their lives will be miserable but hopefully many more will make better decisions.
In the course of their self-harm though they also tend to damage society. The starving addict doesn't just lay down in the street and die. They beg and they steal because they're desperate. They rip copper out of buildings while just harming themselves. And maybe eventually they're arrested and live off the state anyways (at much increased prison rates).
How far do you let them sink before you need to step in.
Yang’s UBI was never intended as a replacement for a safety net which was gravely miscommunicated / twisted by our outrage media dynamics. What he’s advocated for are completely universal programs without means testing that build on top of UBI as a presumption such as his (somewhat weak, yes) disability program. His entire thesis of the economy is that people both rich and poor are suffering enslaved to a dehumanizing economy that ironically destroys human potential and suffocating itself (the very opposite of one trend of capitalism in the past few hundred years) and destigmatizing assistance across all lines is important toward resolving the human toll politically.
"One of the big reasons for UBI is the belief that an individual can better assess their own needs and wants, and procure them more cheaply than the government"
Perhaps, but many of the major problems we have today are tragedy of the commons situations, and that's precisely when we need government to step in, not just leave it up to individuals.
Food stamps have similar problems to money. Food stamps are sold or the items purchased with food stamps are. The resulting money is used to buy oxy and whiskey. Food stamps are just another currency with a terrible exchange rate.
Appoint a guardianship or place them in a group home. Addiction isn't going to be solved by food stamps. Give them treatment and if they keep relapsing, then declare them incompetent.
> I don't think the all-or-nothing approach of UBI makes a ton of sense. We can do things today like more free or subsidized food that would work exactly the same way as it would under UBI, with potentially more buy-in.
Who is suggesting that this is the final form and cannot be ammneded? If anything, I think Dorsey just did what should have been done with the first wave of the vast amount of Campaign funds the 'Yang Gang' raised and actually create a through analysis along with coherent and cogent overview on the means by which it would initially be deployed with all of its cost-risk benefit analysis.
At which point it could then be vetted and and scrutinized via public discourse and eventually be further refined after some changes or be deemed worth a first trial process. I dislike Democracy as a system of governance on just about every aspect, but perhaps this is one of the few usecases it may have as we transition to this model at scale and will require the participation of everyone for it to succeed?
But your position is like following the fallacy that software is 'done' once its beta has been released... that's just not how this works. And the maintenance of this deployment is just as important, or more so depending on its application, as the creation of its earliest iteration.
You're a Cryptocurrency/Bitcoin person, don't you think Aurora was worth it, even though it failed? It showed us what had utility and what seemed sound in a theoretical sense and accepted via convention only to have it be stress tested and fail in practice.
As for subsidizing food, even further no less, is to undermine not just how broken it is but also how one of the biggest reasons the Global Ag/Food Industry not only relies on a system that often yields a near destitute farmer, but is also ultimately built on an expendable and often mistreated and undervalued labor force.
Just look at how meat packer workers are deemed expendable during COVID but required to remain at work due to being an 'essential worker' and a critical link in the Supply Chain, the deaths be damned. We can always get another low skilled, desperate worker to replace them.
You must understand that peril exists for a farmer everyday, getting injured on the job is the norm, working with those (ever compounding) injuries is enshrined within their very culture and it seems near exploitative when properly viewed for what it is as bankruptcy and suicide are often the alternatives to not meet one's obligations in that Industry (see wide scale suicide in Indian Cotton farmers in the 2000s, and the displacement and disenfranchisement of small farmers in the US in the 80-90s caused by large Big Ag-tech, Drug companies and Massive Food consortia).
Food has value that far exceeds its current fiat denominated Market valuation, it is specifically because Governments all over the World subsidize it so heavily (in various ways) and in turn obfuscate the externalities of not just growing a crop but also getting it to Market that it can and often forces a farmer to operate at a net-loss. If you allowed for freer access of Markets that create a means for producers to exchange their products with chefs/restaurants directly as well as the end consumer you'd have a more functional Market based form of price discovery. I should know, I've been both.
So I can tell you right now from both a Biological/Ecology sense as well as a Farmer POV tomatoes will NEVER truly be a $0.99/lbs product if properly priced, they are extremely heavy feeders that will require large preps and amendments to the soil upon planting, and ideally crop rotation as well as lots of labor during and after harvest, but also materials to trellis, prune, the labor costs for pest prevention, weeding, storage, transport etc...
In short, less subsidies could actually create not just more accurate pricing (as food prices are at very skewed Historical lows) but potentially also a greater supply overall as the incentives for growers/producers have been created to profit from a newly created venture if they can deliver to Market a desirable product at a desirable price.
What happens when someone spends all their UBI on whiskey or oxy and consumes it all and is then hungry? Should we keep food stamps around? Why can't we do that part (universal food stamps) by itself?
I don't think the all-or-nothing approach of UBI makes a ton of sense. We can do things today like more free or subsidized food that would work exactly the same way as it would under UBI, with potentially more buy-in.