I used to be a proponent of universal basic income, but after this past year it's become clear, rent and housing prices will just increase to match whatever extra income people receive. Unless there is real housing reform (not treating housing as an investment) UBI won't be effective.
Housing prices are at historic highs in many non-core cities as demand from covid related changes move high income earners and historically low interest rates allow low monthly payments.
A million dollars in financed money is under 4000$ a month in payments. Many, many couples can afford this. About twenty percent of all income earning couples in the us can afford this.
> Housing prices are at historic highs in many non-core cities as demand from covid related changes move high income earners and historically low interest rates allow low monthly payments.
Things were already going this way. When I left Dallas housing was nearly unaffordable anywhere near the city (where most jobs are) at $110k/year. This was directly caused by comparatively rich people on the coasts getting disillusioned and moving to cheaper areas and folks who can't afford the coasts in the first place moving to cheaper areas. It turned supply and demand upside down, and it destroyed the ability for people who grew up in those areas to have a stake in the city.
Why people care about it now is beyond me. The only difference I see that it's not comparatively rich people anymore, it's actual rich people that are moving.
My extreme political opinion is that no one should be allowed to own more than one property in which they do not reside.
Edit: To clarify - if you own two properties, rent one, and live in the other, you own one property in which you reside and one property in which you do not reside.
It's even simpler than that. What about workspaces? What about shopping areas? Entertainment? There are lots of pieces of property that aren't residential that are owned.
The problem with your solution is that it's just a different problem.
We essentially want to forbid "bad" ownership. But it's hard to define "bad" in a way that doesn't either trample over "good" or "benign" ownership or makes it so subjective, it's pointless.
It has nothing to do with "good" or "bad" ownership. It's about limiting the wealth-storage potential of real estate and promoting more decentralized/egalitarian access to property.
Franchising isn't just licensing out the brand. I can't own two Taco Bell locations unless I live in one. And forget a third. And once you get into trying to figure ways to allow for that, you've created loopholes for people to exploit. Wherein they'll be technically within the rules while violating the spirit.
> It has nothing to do with "good" or "bad" ownership. It's about limiting the wealth-storage potential of real estate and promoting more decentralized/egalitarian access to property.
In other words, using real estate solely to store wealth would be a type of bad ownership.
You're trying to avoid making a value judgment so as to not have to defend the values. Or get into a discussion of whether or not we should be deciding these things on values. But it's turtles all the way down.
I agree that more people should be able to acquire property to make a home. Home ownership should be within the reach of a lot more people. And I think real estate speculation for its own sake is bad.
But I also know enough to know that the problem is bigger and more involved than I've given thought to. So any solution I toss around would be half-baked at best. Even if I consider everything I know.
So, I recognize the problem. I agree something must be done. But I also think that limiting ownership of property to "two" is a bad solution.
But what if no one else in the area could afford to? More to the point, why should they be disallowed from doing so?
> "store wealth" doesn't mean to buy a Taco Bell, fill it with gold bars, then board it up.
Didn't say it did. I think everyone here is comfortable with the concept of real estate as an investment that appreciates in value.
> It just means buying property that makes money (like a fast food franchise, residential rental, office space, pool, etc).
That's not storing wealth, that's generating wealth.
You also mention residential rental. You say one cannot own more than two properties. What happens when one property is massive and I build a multi-resident building on it? Is that one property or N properties?
What if I just lease part of my second property to someone else?
What if my residence is a rental? Or just an apartment in a multi-tenant building? Do I own "one" property or a percentage of another? And if it's a percentage, can I now own two full properties?
Or will I be limited by acreage? If limited by acreage, what about farms? Are we going to be compel people to own parts of farms and lease it out to farmers just so crops can be grown?
There are just so many basic problems and questions with your proposal that it tells me you haven't given it much thought.
> But what if no one else in the area could afford to? More to the point, why should they be disallowed from doing so?
If someone possesses that property illegally, it would be sold in a public auction. Someone will buy the property unless it's genuinely worthless. If no one buys it, most likely the same thing that already happens with worthless properties would happen: It would be left derelict to rot until eventually public funds incentivize some developer to manage a cleanup and re-purposing of the property.
> That's not storing wealth, that's generating wealth.
It is both.
> What happens when one property is massive and I build a multi-resident building on it? Is that one property or N properties?
It is one property
> What if I just lease part of my second property to someone else?
The same rule applies to each of you: Own no more than one property in which you do not reside. Multi-party ownership would most likely relate somehow to cohabitation. For example: If you live with a life partner, it is reasonable to have both of your names on two properties in which you do not reside. So, in that case you would own two properties in which you do not reside but between the two of you, there is still only one non-residence property per-person.
> What if my residence is a rental? Or just an apartment in a multi-tenant building?
If you do not own the property, then it is not counted as a property that you own.
If you reside in the property, then it is not counted as a property in which you do not reside.
> Do I own "one" property or a percentage of another? And if it's a percentage, can I now own two full properties?
If you buy in with a group to own a percentage of some property, that counts as a property you own.
> Or will I be limited by acreage?
I don't think so, no. This is probably a significant attack surface for abuse similar to gerrymandering but would be related more to zoning laws than this property ownership law.
> There are just so many basic problems and questions with your proposal that it tells me you haven't given it much thought.
There are just so many simple answers to your questions that it tells me you haven't given them much though.
Sorry for the late reply. I actually missed this. That's on me.
> There are just so many simple answers to your questions that it tells me you haven't given them much though.
But your "simple answers" aren't right. And they ignore a lot of fundamental complexities.
> It is one property
Well. There's the loophole. If I buy two adjacent properties, why isn't that one property? Or will it be one when I buy both? If so, then why can't I just creep until I own all the property. Then, since it's my property, I can do what I want. Including selling use rights and all that business. Basically not solving the problem you think your solution solves.
> The same rule applies to each of you: Own no more than one property in which you do not reside. Multi-party ownership would most likely relate somehow to cohabitation. For example: If you live with a life partner, it is reasonable to have both of your names on two properties in which you do not reside. So, in that case you would own two properties in which you do not reside but between the two of you, there is still only one non-residence property per-person.
You understand that a lease is not ownership. It's borrowing. If I lease out office space, that person doesn't own that property, they're just borrowing the use.
> If you buy in with a group to own a percentage of some property, that counts as a property you own.
Why? Why as a whole? Why not as a percentage?
> I don't think so, no. This is probably a significant attack surface for abuse similar to gerrymandering but would be related more to zoning laws than this property ownership law.
Owning all of the acreage is an attack surface as well. It doesn't solve the problem at all.
I'm not sure I'm the one who hasn't given it much thought here. You have an overly simple solution that can't handle even some of the more obvious edge cases.
Yeah. Of course the actual law would be several hundred pages long and reference large volumes of existing work. Like any law. And the degree to which you believe the letter and spirit of the law are each used to counter-act each other is a separate discussion.
But, to answer your flippant questions:
Legally possess.
Land and buildings.
Physical and temporal occupation of space and time on the "property" above some reasonable threshold.
I question whether such a law is really necessary. It's costly to hoard property and leave it unproductive. Even if it's owned outright, there's pressure to rent, sell, or otherwise use it productively due to property taxes, insurance, and maintenance costs, as well as opportunity costs of missed rental income or selling to divert capital towards something that actually yields return.
You are assuming that in the given scenario that companies will be allowed to rent houses rather than offering them for any agreement more complicated than outright sale.
Yeah. This type of thing would obviously be up for debate and any real law would be complicated (I did say it is an extreme opinion).
I would expect the starting point to be something along the lines of: Any ownership of a property must be associated back to an individual. Even that of a "company owned" property.
Maybe companies would pay some kind of "property retainer" bonus to people with draconian contract terms that skirt the law and keep the property under the companies control despite some individual employee owning it on paper.
Or maybe, companies would just rent whatever property they need.
So I wonder if this is something you deeply investigated, considered the various ramifications of, or whether this was more of an emotional thing, like you see someone trip on the sidewalk and declare "No one should be allowed to wear high heels outside".
If you have considered it a lot, what do you think the best case against this position is?
I've not studied law or research related to this type of thing. I would say it is more of an emotional thing but not as reactionary as your "high heels ban" example.
I believe the core concept of essentially capping/limiting the wealth-storage potential of land ownership as a way to help "even the playing field" is fundamentally sound.
I think think the best case against this position is to point out the difficulty of implementing/enforcing it in a way that is not flawed in some way that makes it more trouble than it is worth. What I mean by that is that I think existing interests and powers would most likely find a way to maintain the status quo and that that way wouldn't necessarily be a net gain for everyone. But that, to me, says more about the system overall than about this specific idea.
I appreciate your honesty. Here are some negative effects of this:
* Costs:
If the wealthy people are allowed only one house and one other rental, they will build a huge house and rental in a really expensive area, and forego building rental stock in cheap areas. So that means that poorer people will be hurt as there will be less rental stock available to them. Now, you can say, let them buy condos! But a lot of people are not ready for owning their own condo the moment they move out of their parents house, or if they are just spending a summer somewhere, or they have an internship in a different city, etc. E.g. even though the U.S. has an insanely high homeownership rate (probably too high) there is still a good 30% of the population that needs shorter term housing than the commitment of buying a place, but longer term housing than a hotel. And now they wont have that option, or it will be much more expensive for them as the rental stock is large, expensive units in highly desirable areas, and there are fewer of them.
* Ways to bypass it:
Of course it's a bit impractical. Wealthy people in the US will just buy up apartments in Europe or Asia, and wealthy people there will buy up apartments here. So this just creates a class of really remote landlords, because you've made it illegal to be landlord in your own nation.
Also, corporations will buy up apartments -- REITs. But maybe you will ban REITS, which means much of the drivers of more housing are taken off the picture and they focus on building offices only, exacerbating the imbalance between office space and housing.
OK, we did the downsides.
* Benefits:
Well, someone who owns 2 apartment buildings, their own mansion, and 100 million in equities will now own 0 apartment buildings, 1 rental mansion, their own mansion, and 150 million in equities. How is this a better world? And here, I am assuming full compliance.
Point being, I see the benefit as being purely symbolic. Like you have this law passed, and the existence of the law is its own reward. I don't think this is a good way of doing public policy. In fact, it's extremely disempowering to be even turning the legislative process into a LARP. It's a kind of learned helplessness to use the power of the state as therapy instead of to actually solve social problems. Banning plastic straws is one example of this.
Now if you want to say, "Hell let's abolish private ownership of capital", then at least that is going to make a difference and not just be a symbolic thing. It is an honest attempt to get at the root of the issue. But I think people understand this specific attempt is a bad idea, so what they are doing is retreating to these weird little symbolic acts, instead of searching for the next big idea. And I'm not picking on you -- I see this a lot. Just ordinary conversation, and people say "We should ban X", and it's a little worrying how ready people are to ban random things as a form of satisfying some inner unease, due to feeling powerless to address the real, underlying things.
Your "Costs" seem to be assuming that physics and zoning laws don't exist. Some REIT who owns a few dozen properties isn't going to be able to merge those into one mega-rental priced 36x higher.
The rental properties will still exist and either some other REIT start-ups will buy them or their price will drop enough that it becomes feasible for would-be-renters to buy them.
It's maybe possible that your assumptions of Judge-Dredd style mega cities are true but I seriously doubt it.
Regarding remote landlords buying property in the US, I'm really not sure at all how this results in a "class of really remote landlords". They would be subject to the same rules and it's not in any way "illegal to be a landlord in your own nation"
As far as benefits,
>Well, someone who owns 2 apartment buildings, their own mansion, and 100 million in equities will now own 0 apartment buildings, 1 rental mansion, their own mansion, and 150 million in equities. How is this a better world? And here, I am assuming full compliance.
The 2 apartment buildings still exist and as far as their inhabitants are concerned the only thing that changes is the owner becomes more likely to give a shit about the property.
I really don't understand how you could possibly see this as "symbolic" unless you don't assume "full compliance". You have to pick one. Either the law exists with compliance and things change or it doesn't exist/has no compliance and is just symbolic.
> You're "Costs" seem to be assuming that physics and zoning laws don't exist. Some REIT who owns a few dozen properties isn't going to be able to merge those into one mega-rental priced 36x higher.
I am not sure what you are referring to. I wasn't thinking about zoning at all. Don't really care as it doesn't matter.
> Either the rental units will still exist or their price will drop enough that it becomes feasible to buy one almost as easily as you would have rented it otherwise.
Ahh. You thought when I said "mansion", that it must involve some modification in place?
No, housing is a market, it makes no sense to talk about specific units like this. Say you had a 10 unit apartment building that is impossible to own, so it's sold for condos, and then home buyers sell their old home and move in and buy those condos, leaving their old homes, that someone else buys, leaving other homes, that someone else buys, and eventually you get a smattering of 10 homes in random parts of the country that get turned into rental stock. Or maybe some of them are combined into a hotel. Or turned into a corner store. You see, the zoning law that applies to the 10 unit building is not the issue, because as these are shuffled around, the changes will happen where the zoning is flexible, and that will soak up excess demands where zoning is not flexible. This piece of magic is what allows Palo Alto to have strict zoning but people don't need to wander the streets as homeless because zoning flexibility in other markets absorbs increases in demand. Which is not to say that zoning doesn't mess with prices -- it does. But everything is substitutable for a place with different zoning.
Point being, think of what happens to the entire market, not one specific home.
So what will happen to the market?
Well, let's say that there is a demand for 30 million rental units and 80 million owner units. That's the natural state of affairs.
And let's say there are 100 million households, of which 30 million are renters and 70 million are owners, and the 70 million owners collectively own 80 million owner units (some have multiple homes) and 30 million renter units (for the renters). The renters own nothing.
Obviously that's not distributed uniformly. Some owners own only 1 house, some own 2, etc. But things will spread around in this group, it doesn't matter.
So now this law is passed and we have the great shuffle, where households shift their mix of housing and bonds so that instead of one household owning 2 houses and 1 rental unit, and another household owning just one house, now one of these will be sold off so that both own 1 house and 1 rental unit.
Now in the course of this big shuffle, households will adjust their bond/house mix so that some houses end up with more bonds when they sell their house, and others will end with fewer bonds as they buy an extra house. The number of bonds that go long is equal to the ones that go short. There are nt more or less bonds in aggregate, just as there are not more or less houses. And because people can borrow to buy a house, you can go short without having the bond.
The 30 million renter homes will be spread out to some of the 70 million owners who decide to lever up or reduce their bond holdings and increase their property holdings, and there will be 10 million extra homes left that the homeowners can't own.
What to do with these homes? They will be turned into hotels, tesla charging stations, or just take the place of new homes not built. And if zoning laws don't matter, because somewhere in the country those laws are flexible and thats where the tesla charging stations will be built (in Texas).
After the big shuffle ends, you still have an aggregate of 30 million renter units, and 70 million owner units, but alas no vacation homes (it's OK, enough were converted into hotels so people still take vacations. But in Texas.)
The process of arriving at that equilibrium is not worth worrying about, you care about the resulting equilibrium.
But what do we know about this new equilibrium? Well, it will create some discomfort, as home owners would rather have some vacation homes not in Texas. Renters would rather live in apartment buildings, but these were converted into condos. So what you've done is created some mismatches between what people want, and what they can get. This hurts welfare a bit and is usally what happens when people put on the central planning hat and try to remake society by overriding people's choices.
> They would be subject to the same rules and it's not in any way "illegal to be a landlord in your own nation"
Oh, you are introducing restrictions on capital inflows into the mix. That is really cool -- I favor draconian restrictions on capital inflows, because that's basically tariffs. OK, with enough restrictions, then sure, you can enforce compliance.
> Judge-Dredd style mega cities
I don't know judge dredd, but am not saying anything about mega-cities. I'm saying that you have this geographic mismatch, because renters, seeing as how they are more temporary occupants, have a certain need to be in some places, like near schools. Whereas owners have other preferences. And now you've converted the apartments near universities into condos, and the places farther out in the boondocks into the rental stock where the students will live and need to commute a long distance into the school. So this is not a mega city, even though it has worse traffic. But it is the result of some utopian central planner making bad decisions that aren't suitable for a lot of people.
> I really don't understand how you could possibly see this as "symbolic"
It is symbolic because all you've accomplished is to destroy some welfare, but whatever housing equalization you were trying to do has not been accomplished. So in this way it's like the plastic straw ban. OK, people in some blue cities are using soggy paper straws now, but the goal, which is to help the turtles with the straws in their noses, remains unmet, as the plastic gets dumped into the ocean by countries in Africa and India that directly dump their trash into the ocean, and not by developed countries who bury their trash, and keep it out of the ocean. So while there is harm in terms of annoying people, the stated goal of getting straws out of turtle noses remains unmet. In this way, it's symbolic.
Sorry for replying with such a short response but your entire post seems to be based on this assertion:
> Say you had a 10 unit apartment building that is impossible to own
Nothing about this would make a 10-unit apartment building "impossible to own" (unless you're assuming that owning 10-unit apartment buildings is only feasible at scale.) The individual rental units are not the "property"; the land and building(s) are.
Obviously, serious consideration of this proposal would need to round up a lot of numbers to determine the scale of your "Big Shuffle".
People claim others are buying property and keeping it vacant, but this does not seem immediately clear to me. If this were the case, there ought to be multiple vacant properties, but I don't see many.
Why am I being downvoted? Can someone link a study or systematic review that shows there are significant #s of vacant properties.
There are lots of lower middle class people who rely on rental income for their retirement. They work their whole life and pay off the mortgage on their house that they raised their family in, and then rent it out while they move to a small 1 bedroom place and spend their days puttering around the rental house doing gardening and maintenance.
If you own two properties, rent one out, and live in the other you own one property in which you reside and one property in which you do not reside
Owning one property in which you do not reside is completely reasonable when the rule is "you may not own more than one property in which you do not reside"
I'll edit this clarification into my original post.
Ah ok. That makes more sense. However I still disagree. I can definitely see a case where someone does that same thing multiple times in their life. My grandparents did that.
They came to this country with nothing while fleeing the holocaust, and managed to own three houses before they retired by renting out their old house each time they moved to a new one.
I think we would both agree to temper any armchair-lawmaking with the understanding that as any rule becomes more complex it also becomes easier to abuse. But, with that said, I think we would also both agree that including (in this law) something like "Couples who cohabitate may jointly own no more than two properties in which they do not reside." is certainly reasonable.
Unless this was another misunderstanding and you meant to count all previously owned properties to which I would say: If you sell ownership of a property to someone else, you no longer own it.
Well in my grandparents case they never sold a house, they just bought new ones and then rented out the old ones which they still owned. I think it would be simple to solve though -- you can rent out any house you own in which you've lived at least five years.
So you have to be a member of the community and participate in it for a while before you can be a landlord there. I think that at least gets to what you are going for.
So, allowing for the limit on an individual's property ownership rights within a community to scale alongside their residence in that community?
I think that makes sense and inherently circumvents the potential for abuse via inheritance as the individual who would potentially inherit the property could just be subject to the exact same limitations based on residence.
Disagreed. We have corpoeations/Private Equity Firms buying up property to squeeze out as much money possible from these places. Creating an artificial inflation of housing costs and making a UBI look untenable. If the property rush wasn't happening we wouldn't see this. A decent UBI would adjust with the cost of living. Including handling a price surge like this.
Edit to add: More than just a UBI would be needed for the surges probably. Perhaps a more functional Congress would be needed too, at this point.
> We have corpoeations/Private Equity Firms buying up property to squeeze out as much money possible from these places.
This isn't some groundbreaking revelation they had. Corporations and firms are always trying to squeeze as much money as possible. After a few purchases, the stimulus checks go into the hands of the corporations, who are are now flush with newly printed cash. Given that there are few real growth opportunities to invest in, everyone just throws their money at property.
Land value tax is the answer..only allow real people to own residential dwellings, no corps. Secondly every property as a 0.25% higher tax than the previous one, sorted by lowest value, so you're paying lower taxes on the lower costing houses, and the highest taxes on the highest costing.
Finally, the base tax is gotta be way above primary dwelling, normal homeowners shouldn't be penalized.
All the $$ raised is to be used for UBI or Medicare For All, it cannot be borrowed from or repurposed.
Oh I understand that. I just meant the recent mass buys that have been happening.
(this may just be a feeling based on my news readings and not a reflection of reality)
This represents a small amount of the property in the US. Investors own 16% of US housing. And keep in mind that includes investors with 1 or 2 additional properties that they rent secondary to their own home.
It's just not true. Housing prices are rising due to record low interest rates (most people folks on monthly payments, not net cost) and demand shifts due to covid. Housing prices in core cities have largely fallen.
>And keep in mind that includes investors with 1 or 2 additional properties that they rent secondary to their own home.
That directly contradicts the definition in literally the second line of your source.
>Investors — any institute or business that deals in real estate
Institute or business, which doesn't include unincorporated individuals with just a couple of extra properties they rent out.
You can tell they're not included because it says in the article that "investors" only bought "26.5% of multifamily homes" (i.e. multi-unit apartments), so unless you're suggesting that 75% of multifamily buildings aren't being bought as an investment, the numbers don't add up.
I think you're more or less right on your reasons.
I do have add-on thought as far as demand shifts contributing to price increases; A lot of the demand was driven by people wanting to move into bigger houses. Those who didn't have enough equity built-up early on could just tack what they wanted onto their selling price and hope for the best.
One more interesting anecdote; In my neighborhood, housing prices have stayed relatively flat since summer of 2020. There are other nearby cities where the prices have increased more, however they often do not have the same property tax rates as where I reside. (prop Taxes are over 1/3 of my monthly 30y mortgage payment, lol)
Everyone's house is on the market. Some are just too expensive to bother with.
I bet if I offered you a billion dollars a square foot you'd sell you beloved childhood home. And If you're the 1 in a billion who'd turn down that deal with that amount of money on the line, I can simply bribe the local government for them to expropriate you.
Housing prices (in certain areas) are high due to low interest rates, covid related demand changes (moves of high income earners from core cities), and wage growth for high income earners.
Rent and housing prices have already been increasing. Maybe they’ve been increasing more this past year, but even if so it could be blamed on other things.
Lots of people didn’t have to pay rent last year, so landlords (especially smaller ones) had to increase rent for those who could. Also other prices are increasing from inflation and supply shortages.
As long as the price of inflation doesn’t completely cover UBI (which is possible but imo unlikely), it will be at least partly effective.
This is anecdotal and I'm not offering it up as proof of anything, but if I don't say this to someone somewhere, I'm going to go mad from the absurdity of it:
My rent actually went down.
I attribute the decrease to the two new complexes built next to where we were. But yeah, I was shocked as shit. I moved earlier this year, but still, it was weird.
Rents dropped in most big cities in the US because office workers were able to work remotely and started moving to cheaper areas. I don't know why everyone forgot this, it was the prevailing narrative in housing during the middle of lockdown. Everyone was talking about SF emptying out.
It’s really not clear that the increases are due to extra income to regular people. There is a lot of aid money injected into the financial markets, which combined with logistical problems which, to me, are bigger contributors to the increases.
I don't know if that's due to UBI-esque covid stimulus money so much as crazy supply/demand constraints exacerbated by remote-work-enabled migration from expensive cities to cheaper suburbs.
My wife and I looked at a single family home in 2017 in Boise that was $400k. That was a bit out of our price range at the time. 4 years and a few raises later $400k is now in our price range for a house, but now the same house is $800k. Sigh...
It has to be tied to cost of living in some way. If UBI can't cover essentials then it's not UBI.
There are probably a lot of problems that should be covered before UBI really, or they're just going to siphon off UBI. Predatory lending is a good one, loans based on UBI payments seem like an easy scam to get into.
Except if UBI is $10, then cost of living will increase $10. This is an impossibly recursive feedback loop. UBI's effects on the COL is ultimately a turing complete equation, and thus suffers from an inability to analyze when exactly such a recursive scenario will halt.
What is this gobbledygook? These technical terms have meanings that you clearly either (a) do not understand or (b) are abusing to trick less-educated folks into thinking your political opinions are authoritative and intellectual or whatever.
To an audience that _does_ speak theoretical CS, your sprinkling in of its terminology weakens whatever point you're trying to make and comes off instead as silly and pretentious.
Hey... I'm not tricking anyone. I used a term that was related to work I was currently doing. It's not the best term, you're right. But my meaning was quite clear.
If you base UBI on cost of living, and cost of living depends on UBI, then you find yourself in a feedback loop. My use of turing complete was not really accurate, but it was the context my mind was in when writing this comment.
I make mistakes and sometimes speak unclearly. No need to be pedantic.
Your meaning was indeed clear but I find your reasoning flawed and the cargo-cult intellectualism... silly and pretentious.
The main flaw, to me, is the 1:1 correspondence you draw between the magnitude of UBI-style benefits and cost of living. That may be true (at least under some simplified/idealized econ101 assumptions) if UBI was the sole source of money in the economy, but that's obviously not the case. The crux of the "UBI doesn't cause spiraling inflation" argument is that UBI accounts for a sufficiently small fraction of total incomes that its benefit (greater spending power for lower incomes, and the downstream economic benefits of that spending) outweighs its nonzero but noncrippling inflationary effect.
That is, though the $10 cash benefit you describe may of course increase COL, it does so by some amount between $0 and $10 that is influenced by all sorts of factors you're glossing over.
I dunno what cargo-cult intellectualism is. Contrary to what it may seem, I rarely read economics blogs / political philosophy, etc.
It just seems obvious to me that if you increase everyone's income by $10, price of goods will go up by $10.
> The crux of the "UBI doesn't cause spiraling inflation" argument is that UBI accounts for a sufficiently small fraction of total incomes that its benefit (greater spending power for lower incomes, and the downstream economic benefits of that spending) outweighs its nonzero but noncrippling inflationary effect.
How could you have greater spending power if we agree that UBI's inflationary effect is proportional to its amount. The moment you give the money out, the spending power goes down.
In my view, this will just lead to the rich getting richer, because companies end up providing the services people will pay money for, and these profits go into the pockets of the rich, who don't really need the money for life necessities, so instead use it as capital.
The poor are no better off and are incentivized to spend the money because of inflationary effects (saving the money results in it having less spending power when they want to sell it), while the rich have no incentive to spend the money since they're already wealthy.
> That is, though the $10 cash benefit you describe may of course increase COL, it does so by some amount between $0 and $10 that is influenced by all sorts of factors you're glossing over.
Can you identify, name, and explain those factors. You accuse me of 'glossing over' some factors in my 'simple' explanation, while you yourself do not identify any of the factors that supposedly would not cause COL to increase.
Sure: literally everything past the first chapter of any microeconomics textbook. Come on, your position is "it just seems obvious", so I'll just say that it _is_ obvious that economics -- a social science full of interconnected and confounding factors -- is not so simple as "if everyone has 10 more dollars then everyone's cost of living goes up by exactly 10 dollars."
My "wisdom" is that microeconomics is complicated... Hardly a controversial statement. I was being serious about a microecon text, but wikipedia would work just fine too.
I'm not on here to argue with people and it seems you have some sort of ideological bone to pick, so this is going to be my last reply. All the best
Will it increase $10? I can't go out and buy a cost of living, so it seems like it would be hard to pin down. Who would increases prices under UBI? Housing? grocery? childcare? that aspect seems unclear to me.
If UBI is too hard to figure out, what's the alternative? more government housing? medicare for all? What's the least complicated way to ensure everyone gets housing, food, and healthcare?
> Housing? grocery? childcare? that aspect seems unclear to me.
All of them would, because with extra money, there would be more demand for these goods and services, but the supply of the good itself hasn't increased. Thus, companies will charge more. In sum, the total increase in charge will be $10.
So you can guarantee without UBI, there will never be a COL raise/adjustment? Gas,bread, rent won't go up?
If they do, how come? They shouldn't unless everyone gets UBI, it's black and white...right?
The fact is it won't go up, because it'll increase opportunities... there's a lot of alternatives lately to normal housing like land co-ops with tiny houses, yurts, etc... Pool 100k in resources, by some land and you can build a earth bag home that's pretty awesome for under 10k.
It's economical, ecological, and very well insulated.
Why would it be by magic exactly correlated with the exact figure provided by UBI.
In addition you are using turing complete in a completely nonsensical way as nobody is using cost of living to compute with.
Based on what you are saying any economic change would be completely unpredictable and the entire human race would be paralyzed by the decision on how to price a Taco. In reality we muddle through while making general predictions about the effects of our actions and reassessing as we go.
> In addition you are using turing complete in a completely nonsensical way as nobody is using cost of living to compute with.
And yet, emergent behavior does indeed compute the cost of living. When the emergent behavior itself is based on a stat that itself is based on the cost of living, the emergent behavior will never converge.
> Based on what you are saying any economic change would be completely unpredictable and the entire human race would be paralyzed by the decision on how to price a Taco. In reality we muddle through while making general predictions about the effects of our actions and reassessing as we go.
No. I'm saying that if you raise UBI by $10, then the price of tacos go up by $10, so basing UBI on cost of living is non-sensical because it's a recursive loop.
> Why would it be by magic exactly correlated with the exact figure provided by UBI.
Because if everyone has $10 extra to spend, then there will be more demand for the same number of goods, so sellers will raise their prices. This is not just 'goods' either. There will be more demand for financial assets like stocks, and more importantly, foreign currencies. With the higher demand for foreign currency, it would take more dollars to buy pounds (for example), which means the dollar would lose value relatively. In other words, the dollar will be undergoing inflation.
I'm not sure that's a hard and fast correlation. We have indicators that suggest that housing prices are increasing because of equity funds literally engaging in rent seeking behavior by buying of housing stock and turning into rental property.
France has a great system. You can’t rent a house unless the rent is under 1/3rd of your income. It’s not legally enforced, but is very difficult to rent for more of your pay check.
Unlike ireland where rents can be 60% of your take home pay.
I know a lot of people who would be forced out of their homes if this was the case. (In the US) I wonder how it could be implemented without having to massively expand government housing.
It also puts downward pressure on landlords, since as they increase the rent, there's less and less people who can be tenants.
Sadly it might not help around here, because right now, it is very profitable to just buy property and leave it empty, since the prices are perpetually rising.
It's already a thing in a lot / most places in the US. If your established income is less than something like 1/3 or 1/4, you'll need a guarantor who can pay that.
Yeah, there's something really naive about assuming you can just give people cash and have the economy work out. The last time we solved severe inequality it took regulation, innumerable fights against large corporations, and yes, a "bully pulpit". Cash can jump start and right previous wrongs, but to move forward we need legislation.
I don't think this a complete problem. More broadly is that wages will need to rise and prices will need to rise until an equilibrium is reached such that poor people need to work to survive.
While wages rise, other countries with no universal income gain a competitive advantage in labor costs, across the board.
I never understood this but I'm still open minded. How would it not just lead to inflation? You're saying it actually has but I also think our circumstances right now are a bit complicated so I'm not entirely convinced yet.
One of the direct consequences of UBI is inflation IMO. Of course things are going to be more expensive if we give everyone money. That doesn't mean poor people won't be better off. If your food costs 20% more but you have 200% the money, that's a good thing. UBI is like printing money, yes you have inflation, but the money is still useful.
Inflation won't eat the whole UBI (probably), because there's still supply and demande that other revenue generate. E.g. if I pay 20% of my income for food and UBI doesn't affect my income much, I won't be inclined to increase my spending on food by a big %.
note that he didn't say all prices would increase, just rent/housing. This makes sense, because unlike TVs and milk, the supply for housing isn't very elastic (due to NIMBY reasons), so pumping more money isn't going to get us more supply, only higher prices.
Higher price on lower end housing, but that incentivises building more lower end housing (since higher end housing is more elastic and won't have as big of a markup).
EDIT: actually, thinking more about this I don't think lower end housing will see such an increase, since most people already have a home. You'll certainly see a rise in price of lower end housing, but it won't offset UBI, since I doubt people will just take ubi to put it into their housing
And the rest will be captured by predatory lenders. I too am a fan of the concept but there are a lot of incentives in the US in particular that work against the idea.
Can I ask why, when you were a proponent of UBI, you thought this scenario would not happen? Most of UBI's detractors paint exactly this scenario as an argument against UBI, so you must have had a reason. Out of curiosity... what was it?
Agreed. The experience over the last year and the cost of college in the US makes me think that, in absence of some sort of regulation to the contrary, UBI will simply lead to comparable cost increases. This is very similar to what happened with the cost of college in the US: the government gave students free money (they were called student loans, but basically the same), and colleges ate them up through tuition increases. Why wouldn't the exact same happen with UBI?
> While the study does have policy implications, Amorim cautioned that the Alaska program is not a perfect model for universal basic income policies. The Alaskan dividend is a one-time payment which affects the way people spend their money. For instance, research suggests that spending on electronics increases when people receive a lot of money at one time because they can afford those big-ticket items. If they were receiving a smaller amount of money every month, parents may choose to spend on items with smaller or more spread out costs, such as books or monthly lessons.
It should be emphasized that this model is a one time payment per year, as opposed to a monthly payment that most UBI models propose.
My biggest concern with some of such programs, including UBI and child tax credits, which rely on the number of children in a family, is that it incentivizes poorer families to have more kids.
It may not be a popular opinion, but I generally see poorer families with more kids, regardless of the race, while more affluent families generally have fewer kids. This puts more economic pressure on poorer families and such kids generally don't end up getting good education or going to college.
Unfortunately, I don't have an alternate solution.
People don’t have children so they can get a tax break.
Your argument is remnant of a moral panic over “welfare queens” in the 70’s which continued through the 90’s [1]. It’s been found tax incentives like these actually reduce family sizes over time [2].
But people avoid having a second, third, or fourth child if they know they can't afford it. Bringing in epithets from the 70s isn't helpful. The original commentator was clearly offering an opinion that wasn't rooted in racism.
I agree that the opinion was not rooted in racism, another sibling thread makes that clear. However it is still a reactionary stance that should be educated. Every UBI or welfare proposal cannot simply be shut down because because of a leaky argument like this. The cost of having and raising children goes well beyond the meager tax credits or UBI proposals anyway.
Is there anything wrong with classism, and is there any reason to lump these together that is not extremely specific to the USA?
I grew up relatively poor, and I am generally very classist (modulo educational opportunities, i.e. for adults with no/little other disadvantages) because, well, I knew and saw a lot of poor people; almost all the same ethnicity as myself.
Kinda, yes. You can have a opinion that is classist/racist without being a classist/racist. This is one of the points of systemic racism/classism. You have this opinion because it's been informed via the zeitgeist of American rhetoric.
The question is, given this new information, do you update your priors and your opinion?
I disagree, but for what it's worth, in case you were not able to tell from my username, I'm an immigrant, from India.
While I have been here in the US for many years, much of my life, including college education and a few years after that, was in India. So, not sure if I'm afflicted by the American systemic racism.
That might be an incentive worth having. Otherwise the USA will join other countries with a declining population shortly.
It really isn't in the metric of most people having kids to get more benefits. No matter what the benefits are, the costs of kids eats them. I am not accusing you of this, but it is a popular trope in some news circles to point out the welfare mom popping out kids for more benefits, It really doesn't work that way. You can watch people locked up in prison for killing someone over $20 tear up over their kids. If you don't have children you might not know the immense desire parents have to provide the best they can for their kids.
As far as poor families having more kids, yes I am one of them. But I have gone to university, and I have paid more in taxes than my entire family ever received in benefits. So that was a good investment.
The welfare queen meme that somehow having kids is a net income gain for poor people simply isn't true, and never was. Kids are incredibly expensive, and there really isn't much economy of scale with them.
The reasons why poor people have more kids has been well known among public health and economic researchers for years. It's lack of family planning and economic opportunities.
There’s plenty of economy scale to having more children. The bare necessities scale quite rapidly with sleeping space (one more bed costs less than one more room) and large pot cooking (one trip to the store and buying in bulk). Most children’s clothing can be handed down to at least one other child.
The child rearing also scales when you have a single earner family unit as even the stay at home parent’s eyeballs can be shared. And after a few years the older children themselves provide some of that as well.
What doesn’t scale are things we used to consider luxuries. Plane tickets, paid summer camps, or private school tuition.
I think it’s more selfishness on the part of higher income earners than anything else that prevents them from having more children. Both in time commitments and the thought of having to give up or pare down an expensive vacation.
Not the GP, but all of the above is true. There's a warped "coastal 9.9%" perspective on having children where someone in the Bay area working at FAANG on principal level told me they cannot afford a 2nd kid because of how much private school/bigger house/... would cost. There's also the model the rest of the world uses, and probably "normal" people in the USA too, where you share a room with your siblings, wear your older cousin's clothes and then pass them on to your younger sister when possible, etc. ;)
Children are not expensive for most poor people, I don't understand how you can claim that. Most poor people have stronger family networks, because a lot of poor people are immigrants, with stronger communities than most 'Americans'. If you have family / community help, children are not expensive at all.
My mother was an english teacher in a predominantly hispanic area. The women (it was mostly women given time of day) openly admitted to having more kids for the checks. I have no problem with that personally. They hardly paid anything extra for their kids. They had grandmas, sisters, friends, churches, etc to take care of the kids. And my mom watched them too during class. Didn't cost them very much. Education in this country is free.
The 'studies' that find having kids costs more money, assumes everyone lives like rich white people.
OTOH the birth rate is below replacement rate, sometimes much below, in quite a lot of developed countries. increased immigration will lead to social unrest; not increasing the birth rate leads to demography of Japan (now) and China (in 20-30 years).
children should be a pressing political issue no matter which way you look at the problem. if you add environmental impact of every child, even more so...
Fertility is literally just a measure of how many people children people are having. Your data is largely capturing the fact the age at which your income tends to peak and the age at which people tend to have children are very far apart.
People generally earn more after being in the workforce many years. It is no surprise, to me, that older people are having fewer children than young people.
Because I think you are trying to answer the question of whether giving a specific person more money would cause them to have more or fewer children. You want the marginal fertility associated with a given marginal change in wealth. If you don't control for other factors then you are just taking cultural influences (e.g. that possibly some national origins or races prefer larger families) and multiplying them by the association between that race and wealth (e.g. that some race within a given country is systematically impoverished). So, that would be an invalid analysis without the control.
Because the credits come no where near close enough to cover the actual expenses of having kids and this constant means testing makes programs harder and more expensive to enforce, and very few people are having kids to get credits and the credits are designed to ensure that those children have some sane baseline of support?
I sincerely apologize if you feel that way, though that was not my intention. It if matters at all, not that I need to defend my comment in such a way, I'm a social liberal.
It is an observation and I will accept if there is a different reason, causation vs correlation.
There is no proof that credits incentivize poor people to have kids and plenty of proof that credits help poor. working, middle, and upper-middle class people afford the children that they do have or want. It's the welfare queen mythos repackaged all over again.
Additionally, what is the problem with having more children if the family is able to support them at some baseline with these credits? If a credit allows a family to plan for and have a child that they wanted, what is the harm to society and you caused by this?
That's because America is defined by its cultural pluralism. When you have cultural pluralism, welfare does not work as well, because you are now taking money from members of one culture and giving it to another, and the cultures may be at odds with each other.
For example, i am a conservative Catholic. You can tax me sure, and spend it on welfare for atheists who love abortion (or whatever other group... just making up a culture I have little in common with), but then I, and others like myself, will want to have opinions on how my money is spent. If you didn't take my money, I wouldn't care.
A lot of strife over welfare in this country is due to the fact that we hold several cultures that are at odds with each other. For example, the amish don't like war, yet they pay taxes. If you asked the amish, they'd vote against war, but conveniently, they are outnumbered, so their money is co-opted. If the amish believed in protesting, and making a big fuss, this would be a major issue. Luckily for the powers that be, they don't. Ultimately, the more government programs / spending one has in a pluralistic society, the more civic strife there will be. This is unavoidable
In my area, the St. Vincent de Paul Society provides help with food, housing, and other needs in the community regardless of the recipient's religious inclination.
Catholics are encouraged to donate to them and volunteer their time, and there's usually a once-a-month supplemental collection for them at Mass.
Catholics are called to provide charity even to non-christians, so there is no fundamental reason to only provide for our own community.
However, welfare and taxation is not charity and you do not grow in virtue through taxation. Welfare is meant to keep a good society. As catholics we have responsibility to vote (if we live in a democracy) for policies that form a just society (this is the original meaning of social justice before it was co-oped by the woke). There is no fundamental conflict between providing for non-christians here, as they too may fall on hard times.
Sorry... were you trying to get at something here?
> And I am now curious about your beliefs that conservative politics will lead to a just society.
Of course not. Politics will never lead to a just society. There is no such thing as 'conservative' politics; or at least, such a thing is not advocated for in the United States. This is because most 'conservatives' are united not in any particular vision of the country but rather by what the country should not be. This isn't to say that individual factions don't have clear ideas of how society should be; just that no faction predominates. With that aside, by most meanings of 'conservative', it is used to mean limited government, little welfare, lower government spending, and policies encouraging social conservatism. Yes, I am broadly in support of these things.
On its own however, these things will not lead to a just society.
You need both conservative politics and a moral society to achieve a just society.
Unfortunately, the government cannot create a moral society. That is up to individuals to accomplish. We cannot vote on society being good. Many individuals in the united states view their only obligation to politics and the community is via voting and government. This is the worst take ever imaginable. After one votes, after one protests, after one calls their senator/representative, there is yet more to be done for community. Most people do not ever get to this level. It's not just volunteering to help those who are of a different class than you. No no no... that's the uninteresting part of civic duty. The interesting part is what you do for people like you. Do you spend time making your friends worlds a better place? What about your family? Do you make sure your friends and family aren't falling into destitution? Those things are the intangibles that no amount of voting or politics will ever fix, when a culture is broken.
For example, many liberals want universal child care paid for via public money. I don't think this is a good thing because I don't think children should be raised by businesses. They should be raised by their parents (they should be educated by them as well, in the early years at least) and their families.
In order to achieve this goal of having more parents stay home with their children, we both need to not have universal child care (should probably severely rethink public schooling too), as well as create a society that understands that parents staying home is the right thing to do, and thus does not do it. The first part is easily governmentally achievable; the second part is not. Although it's true that our current society incentivizes both parents working, there is no fundamental reason they have to (other than most people's desires for more material goods). Many subcultures in America achieve a one-income family (Amish, many evangelicals, many conservative Catholics, etc).
As another aside, I give thousands of dollars to direct action charities. I have no problem with this and would like to give more. Yet, I would resent if government took this money and instead used it, preventing me from giving it to those in need. In a lot of countries with more welfare, the people themselves become less charitable, because any social problem they expect someone else to fix. Those who fall behind anyway are looked at as failures. Far from forming community, welfare atomizes society. Thus, I am very suspicious of government welfare. Better for it to come from individuals. Tax breaks to encourage charity are fine, and better, indeed.
So no, I don't think conservative politics will achieve anything other than not directly incentivizing people to do bad. Fundamentally, I'm conservative because I want the freedom to do good.
I appreciate your thoughtful answer, though I do not agree with your beliefs (to the extent that I think your beliefs are not only not-good for society but actually harmful for society).
Given that I am also a conservative Catholic, there are plenty of things to wrestle with here.
One is that we're engaged in our own internal culture-war around liturgy, the dwindling priesthood, and what to do about social issues that pit Western society's priorities against long-standing Church doctrine. When the most prominent Catholics in the news aren't acting Catholic, that drives us crazy.
But I don't think pluralism is really the problem; Catholics, at least in America in my lifetime, never had any kind of puritanical control. The problem is that there's a new amorphous religion of the state that insists it doesn't exist.
Pluralism is not a problem, because civic disagreement is not a problem. I was responding directly to the parent comment:
> It's America--everybody thinks everybody else is living their lives the wrong way.
I'm explaining why it is that others think they are living the wrong way.
> One is that we're engaged in our own internal culture-war around liturgy, the dwindling priesthood, and what to do about social issues that pit Western society's priorities against long-standing Church doctrine. When the most prominent Catholics in the news aren't acting Catholic, that drives us crazy.
Absolutely, and it's because the church in America is splitting into two cultures. On one hand, there are catholics who want to be American, and fit in with secular society. On the other hand, there are those who don't see it as that important. These two groups have different cultures.
It is. The poor are often considered lazy, stupid, and paradoxically devious. Case in point: Look at how much control and spying employers place on low wage workers compared to high wage workers.
I've always wondered if this belief about poor people is traced back to puritanical Calvinism.
> Look at how much control and spying employers place on low wage workers compared to high wage workers.
Has it occurred to you that this is because low wage employees might actually commit more thefts and such?
I mean... I've been on a grand jury, and i've seen the lengths some companies go to prevent theft from what I presume are low wage employees. These systems costs lots of money. If low wage employees were actually not stealing, then why would they expend all this money on these systems? It would seem any actuary would be able to tell you you're throwing money away. And yet, they continue to have the systems.
I don't think low wage employees are 'bad'. I'm just pointing out that if the employer behavior is so irrational, then certainly some company would start that wouldn't do that. That every single one does I think indicates that this is a common enough problem.
Have you considered the time theft of high wage employees going to the restroom, eating snacks in the break room, or having untimed lunches? That’s time that could be spent being productive.
Surely the your team would be more productive if the LOCs were tracked per day and they had to get permission to use the restroom, or better yet use a piss jug. Did Jim really go to the doctor, or pick up his kids from school, or did he just go to the bar and get drunk? Better demand that note, and GPS track him.
Honestly, you're right. That's why low-wage employees working in non-goods occupations (like clerks and hospitality) don't get mistreated. It has to do with access to goods, which are easily quantifiable.
Certainly it’s easier to police physical theft, and that’s certainly part of it,
However low wage employees outside of property control are also monitored and controlled more than higher wage white collar jobs. For example, look at call center employees.[0]
I think it’s a combination of class (ie white collar workers are more similar to the management and owners), and low wage workers being considered more replaceable, thus managers feel freer to engage their baser impulses. Throw in a bit personal bias and stereotypes and voilà! You have a horrible situation.
Not universally, but it's hard not judge when you see what some people are buying with their (restricted) benefits card(s), and then what they ring up separately and choose to spend their cash on.
I think it depends largely on how much you're exposed to it.
Is it also acceptable to judge billionaires who take money from taxpayers for worker retraining / property tax breaks instead of spending their own cash?
Of course it is. A rational person can understand that both the poor and the rich sometimes misuse earmarked government funds (although they generally do so in different contexts), and recognize that both are wrong.
Generally it's the billionaires making 3% or whatever of every dollar that's getting run through those benefit cards.
But that doesn't mean that tax incentives or contracts already agreed upon shouldn't be honored.
Be upset at your government for bribing a business if you think it's a bad political decision, but it's just as rational for the business to accept it as it is for anyone to accept Snap or any other benefit.
When you start justifying $ redistribution for everything under the sun, don't be surprised if some of it gets redistributed in ways you disagree with.
It is incredibly arrogant to believe you know enough about their lives to judge them.
Further, if other people presumed to stick their nose in your business in the same way to judge you, I'm fairly sure you'd be very offended. And rightly so, because it would be very rude.
It's pretty easy not to judge people for buying stuff with money that they have. It's called freedom, you know?
The root of the problem is with the judger, for thinking that money from the government is somehow less worthy than money from other sources (wages, inheritance, government-subsidized business wages, etc).
When they skimp on what they buy for their kids so they can buy what name brand junk they want for themselves with the balance, and then spend cash on something like expensive earbuds, or one of the vice-lane purchases, I'm going to judge.
Freedom means freedom to make poor decisions, but when that money was given to you by taxpayers and is specifically earmarked to feed your kids, not spending it on your kids makes you a bad person.
In short, it talks about how in US poor people are being judged as moral failures. Buying "display items" like expensive handbags makes them look less poor. So it is an investment because when they look less poor, others treat them better. Others being predominantly people with power over them - bureaucrats, managers and so on.
(the article also discusses racism)
EDIT: and you see this at all levels of wealth too - there's certain expectation of a lawyer arriving in Mercedes or BMW, otherwise some people will think them incompetent, for example.
Yes, the power of anecdote over data. The vast, vast majority of people who receive these benefits use them as intended. I know that it's virtually impossible to get people to stop letting their day-to-day interactions inform their position on welfare benefits, but please at least try and look at the program as a whole, and not individual uses of said program.
That's why the key is to help people understand the cost and benefits of the system overall and not try to change their perspective on individuals.
If the system is effective for the vast majority and the cost of those abusing the system is less than the cost to prevent the abuse then that's generally a win. (Of course you have to be careful of second order effects and unintended consequences. If people can easily get away with abuse will abuse of the system grow?)
In other words, you don't need to convince people that abuse of the system isn't wrong or that it is impossible, i.e. the "don't judge" comments, you need to convince them that the system is effective in both costs and outcomes.
Ironic how uncharitable you're being while accusing others of the same.
It's pretty easy to understand why someone who perceives themselves as working hard and paying taxes would be upset when someone else seems to be using their government benefits to buy more than the "bare necessities" without the hard work.
Whether that perspective is helpful, good, or correct is a different matter but it's certainly not an affront to "freedom" as you mentioned. Money from the government might not be less worthy but it does come at the cost of someone else.
> Money from the government might not be less worthy but it does come at the cost of someone else.
This is partially true at best. Spending does not equal revenue, and it doesn't need to. The best way to think about government taxation is that is money that is collected and destroyed. Then new money is printed to pay for government services.
In other words, the government spending money did not take any additional money out of your pocket...in fact, for the past 40 years, for the most part, the government has been trying to put money back in your pocket through tax cuts. Of course, we are now at the point where another tax cut doesn't effect 70% of tax payers because their tax burden is so low or non-existent.
Regardless of the actual policies and intentions, a person who pays money to the government in taxes is going to see someone getting money from the government as being partially funded, or taken, from themselves.
For what it's worth though I agree with you. Government programs should be funded and planned based on net-benefit to society not strictly on an individual idea of fairness.
An example would be homelessness or drug rehab programs where it ends up being cheaper and better for society to help people than to continuously ignore and/or punish them.
It's not that money from government is less worthy. It's that money from government came from my wallet, thus I am entitled to an opinion. If you didn't take my money, I would have no interest in sharing my opinion with how one ought to spend it.
Everyone's entitled to an opinion, no matter what the situation. That's called freedom, too. What you are also entitled to is a vote, and you can feel free to vote for politicians who will enact your agenda, which seems to be holding poor people accountable.
But that doesn't really have anything to do with whether or not your attitude is actually constructive. You seem to be stuck in the 80s era of Reaganomics/welfare queens thinking, which has since proven to be incredibly ineffectual, destructive, and misery-causing.
> It's that money from government came from my wallet
Did it though? Government spending != spending your wallet money. Because money is fungible, I can easily make the case that all of your tax dollars went to whatever you value in government, and that we borrowed the rest of the dollars to pay for these beneifts.
Well if I contribute 0.000001% or whatever to the federal budget, then I'd say I contribute 0.000001% to whatever welfare payment anyone receives. Money may be fungible, but when you pool money and decide to spend it, everyone from whom it's pooled gets a say.
Is my vote not the say? If I am a christian and I don't want my money going towards abortion, then I'm going to vote for candidates who support that. That anyone should argue that I should not have that say is frankly scary.
And yes, because it's money from my pocket (as I explained), if someone asked me directly, I would have opinions on how it ought to be spent.
which is what you would normally expect, on the other hand following the conservative narrative on these kinds of things my parents definitely would have spent it on gambling, drugs, and alcohol.
Spending on kids increased. I expect spending also increases on gambling, drugs, alcohol, etc.
It’s not surprising that with more money, people spend more. People with kids spend on kids. But not kids exclusively.
The question that wasn’t answered was whether this was an efficient intervention. If our goal is to help kids then there are likely other interventions that are better than cash to everyone, including non-parents (ie, daycare, school lunches, library programs, etc)
> higher-income households were also more likely to spend payouts on nondurables, which he speculates may be “lavish” spending, I find that expenses on recreation or lessons do not increase among parents across the socioeconomic spectrum and that only middle-income and, particularly, low-income families’ spending on education is responsive to payouts in the short term. This last result is aligned with a series of studies suggesting that lower-income parents may use cash transfers to “catch up” with their more affluent counterparts.
From the paper, linked in the article. Quite disingenuous to assume that low income families must be wasting money on substances, while the statistics always show that richer individuals obviously can afford and do spend more.
It seems obvious that richer families spend more. They have more to spend.
I am assuming that everyone just spends more on stuff. The part of interest, that I don’t see in the paper, is if the ratios change with added income. Not the absolute amounts.
What is of interest to me is that if someone spent 10% of their disposable income on education, do they spend 10% of their extra cash on education? Or is it different. Likewise for substances. What’s the baseline percent and the percent spent of extra cash.
And then compare across socioeconomic classes.
It’s frustrating to see such bonehead statements like people who get money spend money without describe other things of interest. I don’t think anyone debates that rich people spend more than poor people.
> It’s frustrating to see such bonehead statements
Please be civil and consider whether you’re actually trying to have a good-faith discussion.
> people who get money spend money without describe other things of interest
Did you read the passage I quoted? And the table in the paper nearby? They clearly show the effects of the benefit on different categories of spending split across income groups, just like you’re asking.
I did read your comment and the table and that’s why I commented. There’s questions but no answers.
I wasn’t referring to you as being boneheaded and don’t want you to think that you’re targeted. I’m commenting on the paper and other discussion on the topic that seem to be cherry picking parts of data without questioning or digging into. Then I explained why as I think basic questions are missed and non-significant findings are presented as if they are significant.
I’m sorry to use anecdotal evidence, but I have to strongly disagree this is a straw man. I spent the first 20 years of my life surrounded by strong conservative influences and the belief that people getting assistance are addicts and stupid with money is key to the conservative platform. Most of conservative economic beliefs rely on the idea that poor people are poor because they’re stupid or lazy.
I would argue that the conservative economic view is not that poor people are stupid or lazy, rather government subsidy incentives (welfare/UBI) can motivate people to act stupid or lazy which ultimately only promotes the need for more government intervention. An endless cycle which ultimately results in enriching the government bureaucracy itself.
That was a fine position to have prior to say 2000 when we didn't have a lot of good data and ways to analyze it. We now have data and incredible analysis tools, that outcome is not representative of what actually happens.
Can you site a source? The current employment participation rates would seem to indicate that the unemployment subsidies have a big effect. The participation rate of males 25-54 is near all time lows back to 1960.
It that causation held, then the opposite would also hold, that is, removing the UI subsidies would have a large effect on the employment participation rates. That turns out to not be the case:
UI subsidies may only be a contributing cause, I would guess there are multiple factors. What do you think is causing the terrible participation rates?
1. Labor participation rates have been expected to decline and has been forecasted for quite a while now.
2. The pandemic acted as a forcing function on those who could retire or were close to retiring into retiring.
3. The pandemic has forced change in care services, forcing workers, mostly woman, to fill in the gap and care for their children and other family members, preventing their return to the workforce.
4. People don't want to work for what amounts to slave wages with no hope of professional advancement and higher wages.
5. About 100 other things that I can't think of right now that make up our complex economic system and inform people's actions other than monetary subsidies.
Things must be pretty good if folks can choose to retire before the age of 54. That also seems at odds with folks quitting due to "slave wages". Which is it? No hope of professional advancement and higher wages seems unsupportable in this country. Why do so many want to migrate here for such a grim outlook?
Regarding #3 I don't think there is a massive move of male primary caregivers for children. Your examples are not a compelling explanation for the participation dip in males 25-54.
>Why do so many want to migrate here for such a grim outlook?
1. People make mistakes, they think the bad outcomes will not apply to them. Anecdotally, it seems many European software developers move to the U.S for some years and then move back, that is to say earn a large amount of money and move back when it is time for the kids to grow up in a better environment.
2. Coming from an autocratic regime without hope of professional advancement makes the U.S look pretty good.
3. Getting killed where you are makes working all day for no money in the U.S look pretty good.
Well then, go and argue with those people where they are. Don’t come here with your stereotyping and anecdotes, hoping for an echo chamber of “yes, we sure all hate those other people who are bad, and surely none of them would be among us, the good and right-thinking people”. This place is for actual discussions, where we treat each other with consideration, respect, and nuance.
I know you're upset; and I know the parent comment above you is upset, as well. This is an exhausting argument on all sides because no one sees eye to eye and it really seems obvious to everyone why the other side is wrong.
The argument that taxation is theft is a libertarian one. Some conservatives are libertarian and some libertarians are conservative; but, it is not an exclusive stance.
Yeah, I really think it depends on more factors than how much money they make. There's so many socioeconomic variables that influence behaviors. But, I do think it could be valuable to try certain models out to learn more about what affects spending.
There is a big contingent that believes UBI would only increase "laziness". How are you supposed to staff an incredibly shitty low paying job if people aren't literally starving? Offering more money or better working conditions is a nonstarter, they would rather just move the work offshore.
Also a strong contingent that believes it makes poor macroeconomic sense as it simply increases inflation with no gains (but probable losses) in net societal standard of living.
This is of course ridiculous. UBI money is much more likely to be spent increasing the velocity of money in the economy than if it were spent bailing out companies. It's very hard to run a consumer economy whilst making the consumers too poor to afford to spend much.
> Amorim found that after the lump sum payments, low- and middle-income parents made more education, clothing, recreation and electronic purchases for their children.
> “Low-income parents do need to spend a greater part of the money they received on basic necessities—for instance to catch up on bills or to fix a broken car—but they still managed with the leftover amount to invest in their children.”
Is the only correlation here that when people are given money, some of it was spent on kids?
Keep in mind, paying bills, auto repairs, etc., can help keep a parent employable. Just because that money wasn't directly spent on children doesn't mean it didn't improve their quality of life.
Low income people already are almost not taxed at all, given how our tax structure works.
The parents that are taxed enough to matter in the first place are making enough money that they can freely give their kids what they want, in general.
The states without income tax tend to have consumption taxes that are much higher to offset them as well as property taxes. I've lived in two of them (WA, TN sans dividends) and study after study shows the poor in those states along with NV and TX are some of the worst off compared to states with income taxes because they share a disproportionate funding into state coffers compared to other quintiles when compared to states with modest income taxes. This isn't to say things are great in WV and Mississippi everywhere, but there's some commons trends across very politically different states only joined by lack of income taxes.
See my edit... I was asking about states with no sales tax. I agree that sales tax + no income tax is toxic. However, most states have sales + income tax. I'm asking if the states with income tax and no sales tax do better.
So those states are: Alaska (no sales nor income tax, but who wants to live there again? Also, they're super weird politically anyway), DE, MT, NH, OR. These states are not exactly high growth states nor bottom of the barrel in poverty, but they do have quite different politics at least so it should be a somewhat valid comparison to the consumption tax centric states.
That only means at state level and most places will add taxes at a locality level. Consumption taxes in general are popular throughout the world not necessarily because they're optimal or something like that but because they are easiest to enforce and administrate compared to income taxes. Just look at our complex federal tax code for what can degenerate within 60 years. Now, with a VAT things are somewhere in the middle between sales taxes and income taxes and is subject to the same political pressures to shift around taxation toward "less desirable" activities as deemed by politicians.
The whole United States has income tax at the federal level. I assume most states that have income tax have that tax stratified like the US does, where less money demands less percentage tax
I don't know about the specifics of where you live, but in most places I know the poor are the most taxed.
The entire supply chain is taxed throughout, from labour taxes, to service taxes, VAT, property taxes, etc. and all of this ends up in the final price of anything that's purchased. Since the poor usually spend all or most of their income, these things are a much bigger burden for them than for the rich who save most of their income.
Even if you take away the entire supply chain, people are still paying VAT or similar taxes on anything they buy to eat, wear, use, etc.
thats what i would do if i could, i haven't seen my one kid since he was 6 months old due to getting arrested and serving probation. my finances were and still are terrible, i had a terrible alcohol dependency and was hooked on drugs for years. i finally got out of that addiction but i only turned to drugs and alcohol because of undiagnosed depression and add.
i couldn't get out of my funk, i was broke when he was conceived and remained broke because nobody wants to hire someone with a record, so i stayed out of his life in order to hopefully become the father who could one day put him through college. he is 9 now, i still havent seen him and i work all the time, it gets me nowhere, no matter how many self help positive thinking books and actions i take, i am still extremely poor and on the verge of homelessness.
i started to finally catch up, i started a business and it looked like i was gonna finally gonna prove everyone wrong about me, you know, have self respect but the pandemic wiped out my business and delayed the reunification with my son. i not a victim but i don't you know anyone who can give me advice and tell me it's gonna be okay, people see their kids and no matter how hard i try, its like i an pushing a boulder uphill only to have it come rolling back down, each and everyday, i dont watch tv, i dont play games, i dont look at memes all day. i literally work from sun up to sun down and apply for jobs only to have people discredit me based on lack of experience in the field and probably how small my apartment looks on zoom.
side note, i got arrested and thrown in the drunk tank overnight, i was stuck on probation longer because i could not make my payments. and what i got arrested for was punching someone while drunk, so i regret that, tremendously. before that i had no record. but i also lived in one of the worst states when it came to criminal justice. i did ard and my record is clean so i have that going for me at least
I'm a little ambivalent on the entire concept of UBI, specifically in regards using it instead of other social safety nets (e.g. food stamps).
I believe this study, and I believe that a vast majority of poor people would spend the money reasonably, but I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues.
I think a lot of people see the majority of poor people acting extremely responsibly and just assume that irresponsible people don't exist. The problem is that they do, even if they are a minority, and we do need to help them too.
I am much more open to a UBI if we have it in addition to our current welfare programs, a lot of people would definitely benefit from having a guaranteed safety net, but I think we shouldn't forget that "the majority" doesn't mean "everyone".
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EDIT: It appears that I didn't explain myself very well. I'm not trying to give a Reagan-esque welfare-queen thing, specifically because I actually would prefer we increase welfare/safety-net spending instead of reducing it.
I'm not trying to shift a burden of blame on anyone, I'm sure there are socioeconomic reasons to why some people lack financial literacy.
I guess what I'm trying to say (and this may come off as hyperbolic) is that I get a little bit of a social-darwinism vibe when people act like people mismanaging money don't need to be addressed in topics of UBI.
Obviously not everyone says this, but there is at least a subset of people who pretend that nearly everyone, given enough money, is this hyper-rational actor who always spends their money efficiently and that we shouldn't worry about the 1% of people who aren't.
Even if it is just 1%, these are still humans, these are still people we should take care of, and these are people that depend on the current level of social safety nets.
I think people spend WAY too much effort worrying about the "small subset of people" who misuse a social system. To the point that their fixation on this small subset causes more waste than just being okay with the fact that some people will misuse a system.
When Covid began, the Ontario Government just handed out cash. You could go to a website and 5 minutes later be set up for a $400 direct deposit into your bank account. You didn't need to prove anything. You just gave them your bank information and personal information and how many kids you have. People got anxious about the hypothetical kind of person who could abuse this. The response was basically: if we try to carefully scrutinize every person, it's going to cost us more, and we're not going to get the money out fast enough. This is for parents who suddenly have to buy Chromebooks and other school supplies for their kids.
If you ask me, I think it all stems from a deep feeling all humans have, but that some cultures greatly amplify: the anxiety that someone isn't rowing while you are.
There's so much of this thinking that misses the forest for the trees. When you're running a giant government program, fraud and misuse are to be expected. The question "will there be fraud?" is rarely the right one - rather it's "factoring in the cost of fraud, is this still a good program?"
There was a fair bit of PPP fraud, but that's okay! It was designed to be relatively easy for businesses to get that money, because getting money into the hands of small businesses was critical. Plenty of the fraud could have been prevented with additional paperwork/validations/etc., but amount saved from fraud by doing that would be completely outweighed by the cost of businesses failing that otherwise could have been saved because they couldn't get the money fast enough.
As a general rule I am somewhat of the camp of "part of what defines us as a society is how we treat the people who have it the worst."
I think even if you could somehow prove that there was a ridiculously huge amount of welfare fraud, I'd still be somewhat supportive of it; I think there's an inherent value of knowing that a safety net exists. If you lose your job, or get into a horrible accident, or have some condition that puts you at a disadvantage, we (as a society) should be looking out for you, particularly in the most wealthy economy on the planet.
I think even if you take a wildly more cynical approach, a substantial amount of welfare is still worthwhile. When people run out of money, society ends up paying for it, whether it's because those people steal and go to prison or end up in the hospital. If you spend $1B in welfare and half of it gets stolen, it's still a great investment if it take down the societal costs of dealing with poverty by $2B.
Especially in the United States, we’re so focused on catching fraud, we probably spend more money on the bureaucracy to stop the fraud than the cost the fraud would have, itself.
Yeah, it's this bizarrely shortsighted focus on making it an absolute priority that nobody takes advantage of us as compared to just prioritizing our own well being.
Worst, we spend so much time trying to prevent fraud, the programs don't reach their full potential to benefit the most amount of people that need it and are qualified to receive it.
"Accepting fraud encourages fraud" is a sensible argument if you live in a society that is breeding fraudsters. I don't think the existence of an opportunity for fraud creates fraudsters. I think it's more a consequence of a society that is failing to equip its people with the education, skills, safety nets, and opportunities necessary to live a moral life.
This line of thinking creates a feedback loop, bolstered by systemic racism and poverty bigotry: the riffraff will abuse these systems so we won't offer them, or we'll make them all but impossible to utilize. And then those individuals struggle and are left with little choice when they're drowning.
> ... confirming a number smaller than originally feared but one that still accounts for more than 11% of all benefits paid since the start of the pandemic.
The overwhelming majority not being fraudulent. That's rather the point, isn't it?
Wasn't implying that this particular program should be scrapped (though it was clearly implemented in crisis mode, with predictable lack of protection), only arguing against the OP's claim that the amount of abuse of social programs is small.
You cited one program built quickly in an emergency. If you take something far more stable and longer running, say SNAP, only about 1.5% is established as fraud.
The fixation on "abuse" of social systems for the less wealthy is just a bias against the poor by relatively wealthy and powerful people. It's not just for food stamps and medicaid. Consider, for example, the utter fixation in the Bay Area with "fare jumping" on BART, where the compliance with the fare system is over 99%, compared with the complete silence among the public and the press on the topic of compliance with parking meters, which is known to stand at about 40%! People believe that armed police should be deployed to eek out the final 1% of BART fares, but nobody advocates for armed police to taser people who don't pay parking meters.
I really don't see how much my post disputes anything you're saying. I said I don't want people to replace current benefits with UBI, not that I'm against people getting no-questions-asked benefits.
I don't want to speak for them, but I think they were agreeing with you and elaborating on their perspective. I do too; UBI as a replacement worries me.
Why is it society's job to prevent poor people from vices, whereas rich people generally get to do whatever they want?
No one talks about CEO pay increases in terms of 'if we give them more money, they'll just spend it on drugs, emitting carbon, and other nefarious things'
The point is not protecting anyone from vices, the point is making sure basic needs are met.
When CEOs spend their money in frivolous ways, they generally have enough to not need to fall back on additional public assistance. If UBI were instituted in place of other benefits programs, some poor people would spend the money unwisely (or unluckily) and still be short on food, housing, etc. when the money ran out.
Of course this already happens in our current system, but theoretically it could happen more without some degree of government control of where money goes (like how section 8, SNAP, etc. work now).
>When CEOs spend their money in frivolous ways, they generally have enough to not need to fall back on additional public assistance
The wealthy receive the lion's share of the wealth created by public subsidies, whihc they then spend as they please.
1. Marillyn Hewson was paid $30mn as a retirement package last year, and 75%+ of her company's revenue comes from the US government.
2. Hugh Grant of Monsanto was paid $20mn and a significant share of his company's revenue is driven by the US's $20bn farm subsidy.
3. Peter Thiel has saved c.$1bn in taxes by using the Roth IRA structure.
I'm not trying to judge the morality of the above, but to act as though the wealthy don't receive government support tht they spend exactly as they please is a short-sighted position.
I'm not sure if you are mistakenly replying in the wrong place, but that doesn't seem related to the basic-needs argument I (and, in a slightly different way, the thread OP) are making.
I'm making the argument that sure, a CEO has $30mn, but if all that is derived from tax revenue, is it really that different than UBI?
Like sure, they don't need MORE than $30mn, but shouldn't we be asking why they got $30mn of public assistance in the first place? By your logic, shouldn't it be like 3 orders of magnitude smaller (Edit: since only the first $30k or so covers basic needs and the rest is allocated to non-essentials)?
You can argue CEOs are overpaid, and you can argue government contracting companies engage in regulatory capture, but this scenario is so tangential that it has zero bearing on the question at hand.
It is when the government decided to outsource a core function (defense) to private industry, solely to enrich people like the CEO of Lockheed Martin.
The head of Medicare makes $450k, why does the head of a company who basically does a government function make 60x that, if not because the US has decided to offer MASSSIVE public assistance to a very small group of already wealthy people?
EDIT: And my point in all of this which you seem to be missing, is that why do you care SO MUCH about the tax revenue that goes to poor people, when you write off much larger amounts of tax revenue that go to rich people? Is it because you think that spending that money to reward people who enable wars in the Middle East is a less bad outcome than some dude doing smack?
> why do you care SO MUCH about the tax revenue that goes to poor people
I really think you might have made your way into the wrong thread. Both I and the thread OP are arguing against the idea that UBI can replace existing social spending. That is to say, we would still need to keep some of the existing social benefit programs if UBI were implemented.
No one here is saying we should take away benefits from the poor, and anger about gov't contractors is not even a tiny bit related to the actual discussion at hand.
I'm arguing that literally any limit on cash given to poor people is a paternalistic overstep because we do not do the same for the cash we give to rich people.
The metaphor is 'Why do we tell poor people that this $1 can only be spent on certain types of food' when we don't say ' This $1 of pork barrel spending can't be used on CEO bonuses unless that CEO submits to regular drug testing.'
I don't know why this is such a hard concept? Maybe you & I just give up?
> I see a lot of I think statements in your post, and no empirical data.
That's totally fair; this is observational anecdata.
Something a bit more objective would be to look at lottery winners [1], a case where someone gets literally millions of dollars injected into their bank account. Despite this a majority of lottery winners end up broke relatively quickly.
Of course, this is going to be a selection bias; typically financially responsible people are not playing the lottery since it's generally regarded as a bad financial investment, but the fact that the lottery exists proves that there's a large enough audience to justify its existence.
> What specific issues are you suggesting result from giving cash over food stamps?
I think there's a risk of an increase in the aforementioned lottery tickets,
> Are you familiar with the absolutely byzantine rules imposed by many states on food stamp recipients on what they can purchase?
> It was recently discussed in an article here I believe. It goes down to specifying which specific types of cheddar cheese are permissible.
Yep! I actually looked into the process of applying for them when I was really broke in 2016 [2], and you will get zero arguments from me that it's a draconian system that needs revision. There are a bunch of arbitrary rules about how they can be redeemed and I am somewhat against those, but that doesn't mean that we get rid of food stamps entirely.
I think it's pretty unlikely UBI will ever replace other welfare programs. At least in the US, the Rs and Ds are currently locked in a battle to drastically increase welfare. Even though the Ds nominally control congress, they aren't able to just ram it through. While I can see things moving further toward the D / increase welfare side in the future I can't see the Rs ever getting a strong enough majority that they would be able to eliminate other welfare programs in favor of UBI. (Which would be consistent with their platform, in the sense that a true UBI -- send $N per month to literally everyone -- would be able to eliminate a huge amount of government bureaucracy that is currently dedicated to administering all these programs.)
In practice, none of the "UBI trials" I've heard about are anything close to UBI, even for a small community. In fact, UBI seems to be getting rebranded as "guaranteed basic income" (GBI), meaning not universal, but "guaranteed for the people we feel like giving it to". All these trials I have heard of still have an income means test, and some are even limited to particular racial groups.
I think that was confirmed in the Ontario UBI study. There was a small but significant minority of people whose lives worsened on UBI. Although a majority reported being better off a significant percentage of people were the same or worse.
The study also showed that it basically did not change people's employment status or job training. That was a benefit touted for UBI. If people had income coming in that didn't depend on working they would seek job training and improve their careers. However, that did not appear to be the case generally.
It took a lot of effort to find this. It was buried beneath news spam in search results where things were cherry picked out of it.
Ontario's basic program was a minimum income guarantee. Not UBI. Earned income reduced benefits. And within 10 months a party opposed to the program took over and announced an early end.
What do you think confirmed frivolous spending? What ruled out chronic health issues or other factors?
Your source said 26.2% started education or training. Where did you see this basically did not change?
71.8% who didn't work during the program cited health issues.
> t I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues.
So what? You realize the top 1% have stolen >$10T from us overdecades of tax evasion, and you want to punish a few mentally ill people who don't spend money in the "right way" that you've personally determined to gatekeep?
This is the problem I have when people say: "the problem I have with UBI is that people won't spend it the way I think they should." It is such a small amount compared to the larger problems, and it would help so many people.
> So what? You realize the top 1% have stolen >$10T from us overdecades of tax evasion, and you want to punish a few mentally ill people who don't spend money in the "right way" that you've personally determined to gatekeep?
That's actually not what I said at all, did you finish reading my post? I made it clear that I want continued welfare programs, I just don't want UBI to replace them. I would be much happier if UBI were added.
I was typing out a bunch of potential issues but I realized after a few sentences that I would actually like to know what you actually disagree with me on this?
If we had a UBI in addition to all the current levels welfare/safety-nets, is this something you actually disagree with? Why?
I disagree with picking on the financially illiterate as a negative to UBI.
Your post took great care to state how much you support welfare/safety-nets, but then oddly decided to take issue with a corner case.
Yes, everything has issues, but why point out the financially illiterate as causing issues? It seems like such a small nit compared to the much larger problems with how existing welfare programs are more at risk for becoming extinct; there is a constant onslaught from Republican politicians to dismantle anything related to welfare. In terms of numbers, that is far more an issue.
Perhaps I over-reacted because I am so used to conservatives looking for a handful of people who spent money on big-screen TVs instead of food as proof that the system is broken.
Perhaps you meant you were truly concerned that the financially illiterate would cause issues because they will need help to use the money correctly. And you weren't actually using that as an objection to UBI?
I didn’t “take issue” with UBI, I took issue with using UBI to wholly replace other benefits, which is often proposed. I think that would disproportionately hurt people who have a hard time managing money.
I didn’t say whatsoever that they “cause” issues, it’s not a moral or intellectual failing to be bad with money, it’s hard for a lot of people, but I don’t think most deny that there are people who have a lot of trouble managing money.
What do you propose we do with these people? I personally don’t think we should just throw them to the sharks and tell them to figure it out.
> I think that would disproportionately hurt people who have a hard time managing money.
Ohhh. Dammit. My apologies, I thoroughly misunderstood you and was arguing from a faulty premise, and kept digging in because I'm doing 10 other things and wasn't giving this thread proper attention. That explains why I thought it was "odd" that you said that, because what I internalized wasn't what you meant.
Thanks for sticking with it and explaining to me.
Yes, we're on the same page.
Some proposals for helping people who are temporarily homeless are to provide an address (public housing) and help them get a job long enough to be able to pay a down payment on an apartment.
However, that's for people who aren't mentally impaired and just need a temporary leg up to get back into the system.
Some benefits do need to be tangibles like you said: e.g. an apartment (public housing, vouchers) or food (meal kitchens, SNAP) and not money because just giving someone money who can't cook isn't going to suddenly teach them how to shop and cook, assuming they can even be taught.
I don't know if there IS any solution today. I know long ago there were institutions but those were largely underfunded and abusive. However, there is public housing where I live that is for people with a certain degree if disability, but they have to be able to remember how to find their house and do simple things like bathe and eat.
If they are beyond that, that's where society has a big hole right now. Do you know of any efforts in this space?
> Ohhh. Dammit. My apologies, I thoroughly misunderstood you and was arguing from a faulty premise
No worries at all; judging by the other comments on my post it appears I didn’t explain myself terribly well.
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I sadly don’t know many solutions to this either; I think making mental healthcare more accessible to people would be a good place to start( e.g. publicly funded psychiatrists) but I don’t think that financial illiteracy is really a “mental illness” in the classical sense.
> but I do think there is a small subset of poor people who will be "perpetually poor." They have little/no financial literacy, they'll spend the money in a fairly frivolous way, and I think giving them raw cash instead of something more or less boxed-in like food stamps can lead to a lot of issues.
I think this phenomena cuts across class lines. There are lots of middle class households that live way beyond their means and basically just use expansive lines of credit - of which poor people don't have access to - to keep themselves afloat. Likewise, there's tons of "Richs to rags" stories of wealthy people who slowly fritter away their wealth with either foolish investing or extravagant purchases.
Both welfare and UBI skirt the fundamental underlying issues of access to capital, voice/control in the workplace, equality of opportunity, concentration of wealth, concentration of power, etc. All of that would just still go on, but people would just probably-not starve.
In fact I wonder if UBI were implemented if many of these things could worsen as political pressure from the working classes in the form of unions and political parties and the like would weaken. If you're able to feed yourself via UBI, why vote for a "left wing" party, or go on strike, or go to a demonstration etc in order to push for more workplace rights, etc.? Hence why I think actually there's plenty of support for UBI from people who would not normally be advocates of extensive social programs.
Many old school Marxists saw welfare programmes as nothing more than an "escape valve" for the excesses of capitalism. Good as a "transitional demand" but harmful in the long run.
This is a complete misunderstanding about what it is to be poor. Poor people including "perpetually poor" aka most poor people are poor because they are lacking not in financial literacy but rather the necessary skills to make sufficient money to graduate from being poor. It's not that they fritter their money away its that they don't have any.
They do jobs that pay them barely enough to afford their shitty lives and invest between commuting and working 50-65 hours doing so in between being parents and spouses and doing not only all the things you do save take time off but doing the paperwork, phone calls, meetings, and leg work to convince people that they are in fact still poor and still need benefits.
If were to sit down and spend time optimizing these people's financial lives you would find that the amount "frittered" away is so tiny compared to child care, food, rent, medical costs that it wouldn't make a difference. Taking someone that for example makes and spends 20,800 and helping them not "fritter" away the 800 will not provide them with a means to climb out of poverty. There never was in that scenario enough resources no matter how they are budgeted.
The most canonical example of this absurdity used to be complaining about poor people buying TVs with tax return checks as if someone who is $40,000 below a middle class household income would SOMEHOW be doing OK if they hadn't spent that $500. My other favorite example is people complaining about poor people pulling out an EBT card and a smartphone wherein the EBT card signifies that the government has decided that your income is $5000 short of what is required to eat and live and the phone costs $200 once + $20 a month while providing vital utility.
Ultimately the benefits you describe as being targeted are pretty much targeted at keeping people from climbing out of poverty. Look at health insurance you can get medicine and care for nothing up until about $2000 a month income and then you have to buy your own insurance. Subsidies are great but they apply only if your employer doesn't offer an "affordable" plan the definition of affordable being if I recall correctly about 12% of your gross salary for the individual plan. There being tax benefits this inspires your employer to offer an "affordable plan" for individuals while jacking up the cost of covering your family. For example with my employers plan the employee + spouse costs 4x as much.
Ultimately moving up from substantial poverty to ordinary poor is actually a net loss. You could if you don't ever want to move up or believe you will be able to be better off staying a little poorer working part time and collecting benefits. Think about that! Would you like to work 60 hours to be as well off as you were working 24? How do you think people respond to that sort of incentive structure?
> Poor people including "perpetually poor" aka most poor people are poor because they are lacking not in financial literacy but rather the necessary skills to make sufficient money to graduate from being poor.
Ok, but why is it that lottery winners tend to end up broke pretty quickly [1]? The use of the word "perpetual" wasn't meant to imply the duration of poverty, but more of propensity towards it. I think there is a subset of poorer people who do not know how to manage money terribly well.
I agree that a very large percentage of poor people might be perfectly fiscally responsible but socioeconomic reasons prevent them from breaking out.
You can't reason about poor people receiving modest sums from lottery winners response to huge windfalls because it's 2 different populations reacting to 2 different scenarios.
People budget poorly in response to an instant massive change in wealth because much of America not just the poor are living financial lives with very short horizons. They make decisions based on gut feelings of can I afford that not mathematical projections. Having a balance of millions feels perceptively like unlimited money so many find the limits of their funds.
Likewise because say a tax refund is too little money to change their lives and not needed to pay bills poor people "fritter" them away on things that they want. This might be unwise compared to saving for a rainy day but it's not a cause of poverty it's a gut decision. Giving people money in a savings account over time with incentive for delaying withdrawal would be likely to produce a different gut decision.
It is deeply ironic that anyone who gets a 6 dollar coffee or 5000 on a vacation probably wastes more than Jane poor did on the TV while declaring the virtues of austerity.
I must point out the US has $28 trillion in debt, or about $200k per American, or enough that if the wealth of every US billionaire were confiscated the debt would remain monolithic. This doesn't include State's 1.2 trillion in debts which are equally insurmountable.
Medicare/Medicaid, Social Security & Defense are the largest share of the spending contributing to this debt, but the proposals for more welfare spending continue unabated & our adversaries have reached or surpassed defense parity in either quality or quantity, or both.
At what point, if ever, do Americans acknowledge the horrific fiscal situation the Baby Boomer generation bequeathed to us and accept that painful & deep spending cuts must be made, instead of piling more spending atop expenditures this country cannot afford?
You can make a deeply compelling argument for welfare spending on an emotional or data-driven basis. The merits aren't the issue. The issue is affordability and prioritization at a time when US politico-economic-military stability and sustainability is at serious risk.
2. The US is chained to maintaining low interest rates forever no matter what unless it wants to bankrupt itself. The Fed is not so independent from the rest of the government that it can set policy to bankrupt the US.
3. This game can go on basically forever as long as the economy keeps growing faster than the debt. That will happen as long as every dollar in spending creates (one dollar times the interest rate) in recurring tax revenue. So, the government can spend... as long as it spends wisely.
If you want some financial science fiction, imagine a world where you can borrow money directly from the Fed at an interest rate that exactly balances your disk of defaulting. In that world, the USG can borrow at 0% interest because it structurally can't default. That's the world we're heading towards.
Why not take advantage of the dollar being the global reserve currency and just keep increasing the debt? Its not like the debt is in some other currency. Its in the same currency so all that the debtors want is more of the same.
Any good arguments on why this can't continue forever? (obviously other nations can't do this)
Losing reserve currency status happened to the Brits beginning in the 1930's and the upheaval it caused was masked in part by the greater hardships and sacrifices of WWII, and the assistance a wealthy (in terms of goods production) America provided GB. It didn't take much for the world to lose confidence in sterling... just the loss of a few colonies to independence & out of control spending. Sound familiar?
A new reserve currency need not be the Yuan or the Euro. There's ample cryptocurrency analogs with the transactional capacity to assume the dollar's reserve/transactional role.
Overconfidence in the dollar is what national security experts might term: "Strategic narcissism".
For one, people have different stages of their life. People, at some point, no longer earn income, and so, it makes sense to plan your debt within your lifecycle of income generation. While you may retire or die some day, there is no date at which the US government stops taxation. The whole idea of "paying back a loan" really only makes sense in the context of a borrower who has limited time to do so.
Secondly, when you borrow money, you borrow it from other people. Most US debt is in the form of treasuries issued to American people and businesses. The people offering the loans to the US government are the often same ones benefiting from it. It's less like "buying a pizza on a credit card" and more like "lending my wife $20 to pick up groceries for dinner".
Thirdly, the US government controls monetary policy. If you want rack up debt on your credit card, you have to pay the interest rate that the credit card company wants, and you have to pay it in the denominations they ask for. The US government controls the monetary supply and the interest rate at which they obtain debt.
And there are many more differences, like the fact that institutions trust storing their wealth in debt issued to global nuclear powers, more so than they trust issuing it to the average Joe on the street.
Because it tries to rationalize or equivocate government debt with household debt. They are not the same for a whole bunch of reasons.
But lets go with this equivocation for a moment. It ignores an incredibly significant part of the equation to the affordability of debt. It always ignores the fact that the US is worth in excess of $200+ Trillion dollars and that combining all debt (personal, government, business) and getting an accounting of the Net Worth of the United States comes in around $141+ Trillion.
That is, we have a debt equal to our income and assets many multiples our current debt and income levels. I have a mortgage that is a multiple my income, so the US is doing much better than myself and I am quickly ascending the Net Worth ladder despite this debt.
It also ignores the fact that this money --specifically money spent directly on the welfare of citizens-- is investment in said citizens in order to continue to grow the wealth and prosperity of the country as a whole and keep us competitive with the rest of the world.
It makes zero sense NOT to improve the lives of as many American citizens as possible in a global economy.
> At what point, if ever, do Americans acknowledge the horrific fiscal situation the Baby Boomer generation bequeathed to us and accept that painful & deep spending cuts must be made, instead of piling more spending atop expenditures this country cannot afford?
Thank you. Exactly this.
I am very fiscally conservative, but I have no problem with welfare in general. However, this country cannot afford it. Many other countries can, and I think that's great. We cannot. There is really no question here.
> I have no problem with welfare in general. However, this country cannot afford it. Many other countries can, and I think that's great. We cannot. There is really no question here.
There is absolutely a question here, and it is obvious.
Other countries raise more revenue (taxes) and pay for more things. That is "great", you say. The US could do the same.
Other countries spend less on other things (classic example is defense). The US could do the same.
The US can absolutely positively definitely afford welfare, and universal health care too.
If we prioritize these things the way other countries do.
The important question is: which countries get the best outcomes for their people through government spending? There are strong arguments that the US is not at the top of that list.
> Other countries raise more revenue (taxes) and pay for more things. That is "great", you say. The US could do the same.
Well sure, but we'd have to pay off our debt first. If you want to raise taxes to pay off debt, I'm actually more in support of that than raising taxes to pay welfare. So far, all tax raising plans to pay off welfare just continue to increase the debt (and it's not like the anti-welfare people end up decreasing it either). So really until then, I'm not in support of anything other than lowering the debt.
I'm not sure that raising taxes will help. The US federal government pulls in a larger percentage in taxes as percentage of GDP than ever before, and yet is still spending it all + some. This is not sustainable.
> The important question is: which countries get the best outcomes for their people through government spending?
No it's not. The important question is: which countries get the best outcomes, whether via government spending or not, and do so while not being in debt?
We agree on one point: the important question is which countries get the best outcomes, regardless of spend or funding.
But I'm unclear on the importance of paying down debt in this case. Will it lead to a better state of things, or is that expectation just a habit we have from thinking about household debt?
Govt debt is different, and US govt debt is even more different.
It is not strictly bad to carry debt at the national govt level. Especially when your debtholders are mostly citizens. People talk about China and other countries holding US debt, but the numbers are not significant.
So what is the right level of debt? That's a good question, but it doesn't seem to be terribly relevant right now (and literally no one knows the answer!). When your debtholders will no longer lend you money, then it becomes an issue. We are not there yet, regardless of what the number is.
Debt owed to your neighbor is usually bad. You deprive them of resources, and the math is zero-sum.
Debt to your bank is usually OK. Everyone benefits from the transaction, at least by design.
Debt to your citizens is great! Your debt limit is a meaningful fraction of the sum of economic value of the nation. Your creditors are also the beneficiaries of your spending. The more you spend, the more you can borrow, because you create economic activity on behalf of your creditors, who then have more to lend.
Debt is absolutely very different when the debtors and creditors are the same people.
Debt to other nations (if you're the US) is also great! But that's a special circumstance.
Except it's not. Debt to citizens represents tax payments that are owed from all citizens to the subset of citizens owning debt.
The rich own a disproportionate amount of bonds. This is expected.
By taxing all people to pay interest to the rich you're just taking from the poor to give to the rich.
Especially considering that the next generation is made up of larger numbers of children of the poor rather than children of the rich, this is tantamount to stealing from the future of the already disadvantaged to give to the ready advantaged.
That is not correct. Something like the bottom 50%(?) of earners, including all of the truly poor, do not pay taxes at all, but they benefit from the spending done on their behalf -- in some cases through directed programs, and in other cases just like all citizens.
There is a stratum of taxpayers who do not benefit directly (i.e. loan repayments) from government debt because they do not hold bonds. And as you say, in the upper economic strata, bond holding is more common.
So the strata that are least-benefitted are somewhere in the middle to upper middle class (such as it is). But these people are mostly OK -- their needs are met, most of their wants are met, but they could optimize better. NBD.
AND: If those strata did optimize better (move some income/savings into govt bonds), then the govt could borrow more and everyone would be even happier except the folks who obsess over the number for political reasons (when political party "not-mine" is in office).
Of course there is a "donut hole" in the middle where the social benefits available (programs) are inadequate, and the economic benefits (bond holding) are unreachable.
But the proposed programs which are running into this wall of discussion are in many cases designed to address this gap. There are good arguments about how best (effectively, cost-effectively, etc) to address the gap, how to design the programs.
But the argument that "we can't afford it" is short, pithy, and easily-comprehended, but much too simplistic to be honest. "We don't want to" is more correct.
UBI isn't communist, it's socialist — but it's a step in the wrong direction. Meanwhile, the FedAccount proposal[0] (for example) is both communist and authoritarian.
What if universal income was distributed to parents based on their kid performance in school? For example, if your kid gets straight As you get $500 a month. If your kid gets straight C's, you get $100 a month.
What if the kids with lower performance are the ones who could stand to benefit the most from a more financially stable household?
In many (if not most) cases, their lower performance is directly attributable to the socioeconomic status of their parents, and their parents’ ability to be present and proactively supportive, rather than in a constant state of reactive anxiety over housing and grocery expenses.
An interesting idea, but children from poor families already statistically
do worse in school. They are less likely to have a stable home environment, access to good learning resources, parents with higher education, among other things. So this system would reward families who are already doing fine. Not to mention it sounds a bit like child labor...
Sorry, maybe too snarkily expressed... My point was, why make such a complicated system? Just give the benefit to everyone and raise taxes on higher earners. Universal benefits are more durable. Sure, some well off people would get an undeserved benefit, however there's way fewer of them in number.
That’s…so cruel. There’s plenty of wonderful children who just don’t work well with the traditional schooling model. Not to mention that’s so much pressure on the child to do well. That’s not fair to the kid.
I didn't intend on this to be a cruel suggestion. I should've put in more context to the suggestion. As someone that grew up in a poor household, I was working unofficially babysitting, pet sitting before 10 and a real job at 13. The thought was rather than forcing kids into side hustles to help out at home, make school their income.
I see it akin to having everybody run a race and giving them cash according to how they place. Except what about this kid who's in a wheelchair? Or the kid who has cerebral palsy? Or the kid who's staying up all night to help run his parents' restaurant and comes to school exhausted?
There's plenty of people who don't get good grades for reasons outside of their control.
Weird that you want to apply this horrible idea to the poorest strata of society. Maybe we should try it on the richest and see what happens?
Or we drop the idea that parents should be responsible for their child’s academic performance; moreso when they’re struggling with low wage jobs and scraping by.
The idea that parents are not responsible for their children's education is why American education is a failure despite spending the most per capita.
We should look to Asia for a good model. The culture promotes parents taking an active role in education and schools publicly rank students to motivate achievement. The results show in international competitions, college admissions, and grad school admissions.
I come from an Asian country and I would argue that parental involvement is not that much different than the USA. Parental pressure and resultant stress is much worse though, so it’s not really a good thing. Ranking and comparisons are also very demotivating at the same time.
Some parents have time and others don’t - just like the USA. The main difference is the style of education itself, and the way that children are taught.
While I don’t have a solution to the USA problem, it’s definitely not because “parents are uninvolved”.
There is absolutely no pragmatic way to manage this, and it would be politically nuclear.
The notion of 'money for grades', while a neat idea for discussion, is definitely macabre, just another version of 'Squid Games'.
A small child bonus, maybe a bit means tested, but not enough to perversely incent people to want children for that reason (some people think like that), would be worth it.
In fact it's probably one of the best ways to spend surpluses that we have. Early childhood education and formation is really foundational and the marginal value of a few extra dollars for those who materially need it can go a very long way.
It'd be political tennable if the Left were not in a civil war between traditional leftist and progressives, and the right were not at war between populists and the groups of traditional republicans.
It seems we abandoned the vision for greater good that we had in the seventies: EPA, endangered species, Title IX. Nixon gets maligned but he pushed through some good regulations back then.
You are no doubt correct about finding cheaters. My point is that the entire system would eventually normalize around maximizing the amount of free money given to children. There would be no hero's made of those who took the money away.
Maybe. In reality not passing kids means their prospects in life are slimmer. Obviously once they hit the job market an inflated grade would be detected in many industries but not all.
I would suspect that the stress of kids risking their family's income is not conducive to better learning or social outcomes, especially for kids with learning challenges or non-traditional strengths (said as a B-C level elementary school student now PhD).
Teachers, parents, or caseworkers don't need that stress either.
Other comments have explained the problem already but basically its just setting up a lazy moral judgement against the poor who will inevitably make up the majority of the "failures."
First build a town with surplus cash with enough Healthcare, jobs, industrial areas, police and fire. Now grow your city until you unlock the ability to tax specific segments. Make sure your city is still in good condition before you start the experiment.
Clone the save file so you can run a control.
City A change nothing an let the Sim run for a year.
City B lower taxes for the low income to 0. Your city should have enough surplus income to make you not go into the red starting this experiment.
Post your results for the Tale of Two Cities simulation.
And then deleted it, probably for fear of reputation or downvotes. Chilling discussion doesn't serve to educate or bring us closer together.
I am happy to see the link from Will Wright and it make a point perhaps we shouldn't trust the initial Sim City engine to modeling, but I would much prefer a person who never flew a plane but has spent time in a flight sim trying to emergency land a plane rather than someone who never flew a plane or used a flight sim.
Sun City is absolutely not an appropriate tool for modeling societal policy.
One of the original authors, Will Wright, gave an interview many years ago expressing his horror when he found out that city planners were doing precisely what you suggest.
Quote:
“I think if we tried to make it realistic, we would be doing something that we wouldn’t want to do,” Wright said in an interview in 1999.
But that didn’t stop companies from believing Maxis could design realistic simulations.
Will Wright didn’t believe that was even possible.
“Many people come to us and say, ‘You should do the professional version,'” he continued.
“That really scares me because I know how pathetic the simulations are, really, compared to reality.
The last thing I want people to come away with is that we’re on the verge of being able to simulate the way that a city really develops, because we’re not.”
