I just told you the answer : people need to be educated on how to use money effectively. That way, they will be able to use the money that they are given - either through BIG or another program - to improve their lives. If you just give them money without education, then a large portion will be mismanaged and they will remain dependent on handouts.K: ok, so, we should throw batteries at it, whip cream, old socks, cats, I open to
what the answer is, however in this case money is exactly what is needed.
Seriously?K: education by whom? and who decides what method of education is being used?
See almost every answer creates its own questions.
phyllo wrote:If I question it then I get a knee jerk reaction that I'm imposing my morality on others.
phyllo wrote:You are proposing to take money from one group of people and to give it to another.
phyllo wrote:I mentioned micro-lending because it has a proven track record in developing countries. And it's relatively cheap.
phyllo wrote:- make micro-loans easier and cheaper. The poor are underserviced by a banking system which does not trust them and charges them exorbitant rates. It seems that the only time that you can get money from a bank is when you can prove that you don't need it.
phyllo wrote:If you want other suggestions :
- teach people how to handle money (in high school). People don't know how to effectively use the money that they have.
- teach people how to start and manage a business. If people knew how, they could create service businesses with little up-front capital.
phyllo wrote:BIG is the same old thinking. Throw money at a problem.
Uccisore wrote:If the BIG's amount wasn't mandated by the Constitution, people on it would just vote to increase it- perpetually, with no regard for the strain it puts on the system. So it's just a catastrophe waiting to happen.
Uccisore wrote:This becomes an inflation generating machine- everything poor people spend money on becomes more expensive thanks to the BIG, lefties argue the BIG has to be increased to keep up with inflation, etc.
Uccisore wrote:As far as the immigration thing is concerned, there is no mystery as to whether or not immigrants are good for a nation or not. If you have an excess of workable land an exploitable resources, then more immigrants to develop that land and exploit those resources is good for your economy.
Uccisore wrote:And before anyone says it, no Alaska does not have a BIG. They have a dividend tied to the profits made by a specific industry. This ensures that the entitlement is actually funded.
Ecmandu wrote:people need to look at issues of the vastness of corporate welfare which makes complaining about non-corprate welfare look absurd.
While I don't have a problem with a constitutional cap, pegged either to GDP or tax revenue, I don't think this actually that big a problem with the BIG. Most of the people in a given society won't see a net payout from the BIG. For any realistic BIG, most people will pay more in taxes than they are given by the government. Every one of those voters would have reason to vote to decrease the BIG and the taxes that fund it, rather than to increase it perpetually.
Furthermore, if the BIG were a program which, once in place, everyone would support increasing indefinitely, why would there be so much resistance to creating the program in the first place? Wouldn't anyone who would want an exorbitant BIG want to see the program put in place now?
There are a lot of good points to respond to in this paragraph, and I appreciate the move towards macro-economic aspects of the program. I agree with your point that the price of certain classes of goods would rise as a result. However, this point conflicts with (or at least tempers) your claim that there would be a net disincentive to work. If the price of goods increases, people need more money, and must work more to get it.
Though, I think these countervailing effects are only partial, and we can agree that 1) prices will increase, 2) the incentive to work will decrease, and 3) the cost of labor will increase. However, we should also note that consumption of certain goods will increase, and combined with the increase in price will make those industries more profitable,
And the spending will be on much more socially valuable goods: the marginal dollar spent by a poor person is worth more than the marginal dollar spent by a rich person, because the rich person is likely to be spending it on something they value less (since they've presumably already purchased all their most-valued goods or services).
I would also suggest (and this is speculative, I don't know of any studies that back this up) that industries that cater to the rich tend to employ the rich to a greater degree than the industries that cater to the poor.
Uccisore wrote:This undervalues humans as a resource. Large, diverse societies are more innovative, both producing better ideas and responding more quickly to social changes.
Niche-seeking immigrants adapt to new opportunities faster.
They increase labor competition and decrease prices.
Immigrants are generally less prone to criminality and more productive than their native counterparts,
The odds that an immigrant is "here just to collect a BIG" and be a drain on society is significantly lower,
I do think this is effectively the same as a BIG. The distinction that it's pegged to revenue from a state industry doesn't change that it's an unconditional income paid to every citizen.
if a BIG disincentivizes labor, so does the Alaska program; if it increases prices, so does the Alaska program; if it implicates immigration, so does the Alaska program.
Uccisore wrote:Carleas wrote: Immigrants are generally less prone to criminality and more productive than their native counterparts,
In the United States they make up a disprorportionately high percentage of the prison population. Anyway, this is either irrelevant or trivially false. There's a couple obvious controls to consider:
1.) If the nation in question is only allowing immigrants who are very unlikely to commit crimes then what you're saying makes a whole lot of sense. That's not the situation in the U.S.
2.) Why are these people leaving their native-born country to begin with? War criminals fleeing prosecution probably have a different incarceration rate than families fleeing genocide.
Uccisore wrote:First of all, 40-something percent of Americans pay zero federal taxes right now
Uccisore wrote:There is no connection between these taxes and this entitlement. Even if specific tax increases are often justified through reference to a specific expenditure, a politician will always be free to promise to increase one without decreasing the other.
Uccisore wrote:1.) If the choice is between people working and their wages paying for their needs, and the people working and their wages+BIG paying for their needs, I'm not seeing the purpose of the BIG. Justifying it on the grounds that it won't be enough to sustain anybody just tells me it won't be replacing other welfare programs.
Uccisore wrote:I don't follow this. Higher consumption, higher price and higher labor costs doesn't necessary equal more profits. If the higher price is just to match inflation then higher labor costs and higher consumption may just mean shortages.
Uccisore wrote:That's true. I just think it's up in the air whether spending increases, labor cost increases, and increased need for production are going to add up to any sort of net good. Even if things reach some sort of equilibrium, what was gained other than giving the State more control over the economy?
Uccisore wrote:What seems to me to be the case (equally speculative) is that industries to that cater to the rich employ the poor in other countries.
Uccisore wrote:Only if the diverse people you're admitting into that society are chosen because they have those traits ["more innovative... producing better ideas and responding more quickly to social changes"]. I don't see why just letting random whoevers into the nation like we do now contibutes anything.
In the United States they make up a disprorportionately high percentage of the prison population.
You seem to be relying on 'immigrants' as being a sort of magical better man than the rest of us independant of the policies in the host nation that draws them.
[R]oughly 1.6 percent of immigrant males age 18-39 are incarcerated, compared to 3.3 percent of the native-born. This disparity in incarceration rates has existed for decades, as evidenced by data from the 1980, 1990, and 2000 decennial censuses. In each of those years, the incarceration rates of the native-born were anywhere from two to five times higher than that of immigrants.
...incarceration rates among the young, less educated Mexican, Salvadoran, and Guatemalan men who make up the bulk of the unauthorized population are significantly lower than the incarceration rate among native-born young men without a high-school diploma. In 2010, less-educated native-born men age 18-39 had an incarceration rate of 10.7 percent—more than triple the 2.8 percent rate among foreign-born Mexican men, and five times greater than the 1.7 percent rate among foreign-born Salvadoran and Guatemalan men.
A variety of different studies using different methodologies have found that immigrants are less likely than the native-born to engage in either violent or nonviolent “antisocial” behaviors; that immigrants are less likely than the native born to be repeat offenders among “high risk” adolescents; and that immigrant youth who were students in U.S. middle and high schools in the mid-1990s and are now young adults have among the lowest delinquency rates of all young people.
Uccisore wrote:In 2015 it was 2072 dollars, the highest it has ever been. So no, I don't think it really has that effect.
[W]e do not observe a significant effect of belonging to a transfer program on employment or hours of work in any of the seven programs. Turning to the pooled estimates[...], we also cannot distinguish the effect of the program [on employment or hours of work] from zero. These insignificant results are not just driven by large standard errors, as the estimated magnitudes of the pooled treatment effects are, in fact, very small.
Finland’s government is drawing up plans to pay every citizen a basic income of euros 800 ($1,165) each month, scrapping benefits altogether.
Under proposals drafted by the Finnish Social Insurance Institution (Kela), the tax-free payments would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.
While it may sound counterintuitive, the basic income is intended to encourage more people back to work in Finland, where unemployment is at record levels. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.
The measure will cost Finland euros 46.7 billion per year. Kela’s proposals will be submitted in November 2016.
phyllo wrote:You're going to take away $3000 from somebody who worked to earn it and you are going to give it to someone else
Carleas wrote:A couple years ago, Megan McArdle summed up a debate she'd been a part of with a short post on the problems with a Basic Income Guarantee (BIG). Here, I'll lay out responses to each of her four criticisms.
(NOTE: in the interest of space, I won't quote her whole argument for each point, and instead I'll pull what I think is representative or summary language from them. One useful response to this post would be to point out if I am misinterpreting her argument or responding to a straw version of it.)Megan McArdle wrote:Cost: ...[Z]eroing out our current income security system wouldn't provide much of a basic income... Getting rid of all of our spending on welfare and so forth would be enough to give each of those people less than $3,000 a year. For a lot of poor people, that's considerably less than what they're getting from the government right now.
First, I think this calculation is off. McArdle only considers spending on "income security", but the programs that could be replaced with a BIG could be much broader. Social Security ($1.3 trillion), disability ($200 billion), agricultural subsidies ($20 billion), and likely many other large government programs could be eliminated or reduced and replaced by a BIG (that "or reduced" is important: any program whose justifications include the well-being of workers should be reduced commensurate to the degree that that justification supports the program; if the well-being of family farmers is part of the justification for agricultural subsidies, then agricultural subsidies will be less necessary if we have a BIG).
However, such calculations might not even be necessary: $3000 a year is not a trivial sum. Globally, $3,000 dollars a year is near the median individual income. Guaranteeing that every person in a country is above the median globally is an absurd achievement. Even in the US, for the median household it would be 6% raise, a not insignificant change. But perhaps the best way to look at it is this: every citizen would get enough money to eat a nutritious meal every day of the year.
Finally, to the point that it's "less than what [a lot of poor people are] getting from the government right now", it's not a 1-to-1 comparison. McArdle treats $1 dollar of food stamps as $1 in value, but any first year econ student can tell you that their values aren't equivalent. Giving people cash is more valuable than giving them vouchers or in-kind services, because cash can be used on whatever an individual values most. You can't save up food stamps to start a business. You can't buy stocks with services. You can't invest in yourself to the same degree with vouchers and in-kind services. And you have to spend vouchers and in-kind services where you're told, so that most of your spending goes right back out of poor communities. Cash lingers, and allows for trade and development within communities, which tends to break the cycle of poverty.Megan McArdle wrote:Reciprocity: ... How can you say that the affluent have an obligation to give a considerable portion of their income to their fellow citizens, precisely in order to free said fellow citizens from any obligation to the people who are paying their bills?
McArdle touches on the response to this when she considers "trust fund babies", but I think she takes that point too literally. The better statement of the point is not "trust fund babies", but "the average middle class American", who has non-reciprocal benefits from their family and social network throughout their lives. A BIG just adds in the same safety net already provided to anyone who's family makes median wage. Moreover, people who grow up in communities of people making median wage or better have plenty of non-reciprocated benefits: better schools, better services within closer distance, less crime, etc.
And while the focus of BIG is frequently on the individuals receiving the BIG, many of the benefits and justifications for it are in externalities. A wealth transfer from top to bottom is a net increase in the value of the currency, as people who might have bought a third car instead give money to someone who can then buy a first (and so contribute better to society). A BIG will decrease crime, it will stimulate the economies of the most depressed areas, it will bring into the economy through opportunity many people who would otherwise be excluded, increasing diversity and thus likely the speed of innovation and the richness of culture. Those are reciprocal benefits, not paid directly by BIG recipients, but nonetheless reaped by those funding it.Megan McArdle wrote:Politics: As I pointed out recently, any sort of guaranteed basic income means ending immigration from poor countries... There is no way that we are going to admit people to this country in order to hand them, and all of their descendants, a check for a thousand or two every month...
...Some people would make bad decisions with their cash, and then we would have to bring back various programs to help the people who make those bad decisions. There's also the issue of people who don't make bad decisions but simply have greater needs: the disabled, the mentally ill, those with cognitive disabilities and so forth. A guaranteed basic income instead of a welfare state might be attractive, but a guaranteed basic income on top of a welfare state presents a lot of problems, not least that it would nearly double everyone's tax bill.
To immigration: first, I think the point is a dodge. It's effectively arguing that McArdle isn't convinced because not enough people are convinced, which is empty. As it stands, not enough people support a BIG to replace other government programs with it, that's clear. What I take the goal of the argument to be at this stage is to convince the thought leaders, intellectuals, and influencers that it's a good idea, so that they can convince the body politic.
And on immigration, a BIG has a lot going for it. First, recall again that we aren't necessarily talking about "a thousand or two every month." A $4000 BIG would be a significant improvement, could replace a lot of programs, and would be a much easier sell. Moreover, there are great security benefits to a BIG. Immigrants would have to make themselves known in order to be eligible for it, so it would encourage honest immigrants looking for a better life to come forward, increasing the presumption of guilt on anyone who remains undeclared.
Otherwise, the argument really boils down to ones stance on immigration. If you think that immigration is good for the country, good for the economy, or that immigration is a right, you will likely not have any problem allowing immigrants and come and participate fully in a society, however it is structured. If instead you see immigrants as a drain or as a threat to "natives", you will likely oppose it regardless of how society is structured. Immigrants use the roads, no matter how much we spend to repair them. They are protected by police, no matter what those police are paid. If a BIG makes things better, there's no reason to deny it to immigrants, and if immigrants add value, they will still add value through the use of their BIG to pursue their happiness.
In-kind services: With judicious elimination of in-kind programs, we can avoid many of these problems. First, many programs that support people who have made bad decisions in the past would be unnecessary: the BIG is not a one-off payment, it's a continuing payments, and misspending last month's check does not need to affect next month's. Also, it should be noted that substance abuse is closely associated with economic hardship. Given a more fulfilling life, many who might otherwise waste away in a bottle would choose otherwise.
Other programs could be reduced without being eliminated. Some people with disability are merely subsidized, and such subsidies could be replaced by the BIG. Moreover, private services would develop to cater to people who might not otherwise be worth building a business around, because suddenly they have available resources to spend on what they value most.
And of course, some services would always remain. Services for those with severe disabilities; legal services; child welfare services. But criticizing BIG on the basis that it can't replace every program is an absurd standard that no program can meet. If BIG can replace welfare and improve lives in the process, we should do it, even if it only means giving people $500 dollars a year and leaving every other program intact.Megan McArdle wrote:Work: If you make it possible for some people to live without working, some people will live without working. That decision will be rational in the short term but disastrous in the long term... Discouraging people from making the short-term sacrifices necessary to gain a long-term foothold in the job market is not good social policy.
First, again, McArdle over-estimates the level of comfort that a properly calibrated BIG will provide. It is possible to live on $4000 a year, and some people live. But many more people will use that to supplement rather than replace their other income. And, they'll use it to fill gaps in employment, so that they can transition to better and more fulfilling jobs, or to gain additional training to be able to contribute more and better.
In addition, an influx of money into economically depressed areas means more jobs available to those most likely to drop out otherwise. Shoveling steps and walkways door to door, babysitting, car washes, these are jobs frequently available in wealthier areas that are unavailable to those whose neighbors are all as poor and desperate as themselves. Or, consider a corner store in a poor neighborhood, surrounded by a populace that can't afford to shop there. An influx of money into the area means more business, hiring someone to stock shelves or wash the floor. The commensurate reduction in crime means less spending on security, freeing up more capital to hire, to develop, to expand and innovate.
Of course, some people will check out. But few who do would have been long-term employed otherwise. The marginal person influenced to drop out by a modest BIG is a vanishingly small number, and to weigh that more heavily than the economic gains, especially in the area of work, is myopic.
To sum up, I've taken the easy route of criticizing someone else's argument rather than make an argument of my own. But in doing so, I think I've provided several compelling arguments in favor of a BIG in some form and at some level.
CelineK wrote:I dont think money will ever mean anything when robotics and mega computers will fully replace man, from the surgeon, the factory worker to the cubicle job. Money and knowledge become kinda incompatible at some point. More knowledge eventually turns the quest for materialism into a mirage.
Carleas wrote:Money isn't only about materialism, it's also about exchange: trading a good for a dollar tells us something about the value of the good relative to other goods. And because it's about exchange, it creates a system that quickly and efficiently aggregates information about the preference of everyone participating in the exchanges. It's a form of voting, and will remain useful even in a post-scarcity economy, though I think something like a Basic Income would be necessary to be just and to maximize participation.
CelineK wrote:Maybe it is time to consider abandoning the concept of money and give more attention to our passions?
I wrote:At some points, some humans will just get in the way of projects already under way. This seems certain if automation continues. And it presents a big problem for policy. What do we do with such workers? Do we just watch unemployment increase? Do we create make-work jobs to keep them busy? Do we provide sufficient welfare to keep them alive? I don't see most modern policy approaches as particularly well poised to deal with this problem, but it's one we would be wise to consider before it presents itself.
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