Climate, Health, and Inequality: A Proposal

Three proposals with strong empirical and theoretical backing are:

1. A carbon tax to reduce emissions
2. Using Health Savings Accounts (HSA) to pay for healthcare
3. A Universal Basic Income (UBI) as a social safety net

Though these are pretty well supported as solutions to the problems they address, they are all fairly politically unpopular. New taxes are unpopular, making it easy for interested parties to resist a carbon tax. HSAs are good for those who can afford to pay into them, but don’t work for people who just don’t have money to put away. And a UBI evokes all the distrust of individuals for the spending decisions of everyone else.

However, if these three policies are combined, the result may be significantly more politically palatable. Here’s how it could work: implement a carbon tax, starting low and slowly increasing over time to phase out carbon-intensive energy production. To reduce the ‘new tax’ stigma, make it revenue neutral: all money is paid out to individuals as a UBI. But to avoid the political landmine that that entails, instead of paying out in cash, put the payouts into privately held HSAs that can be used for health spending until the money has been held for a certain period of time, or the balance is above a certain minimum. After the specified period or beyond the minimum balance, the excess can be withdrawn as cash.

This still has most of the benefits of a Universal Basic Income, since after a few years individuals who have not spent down their HSA will get cash out just the same. Moreover, accounts for minors could be restricted until after the minor turns 18, so that upon reaching majority, people would have a lump sum of cash to pay for school or to start a business (this removes the perverse incentive to have more kids that a normal UBI can be criticized for).

The HSA can pay for health spending in the meantime, including insurance payments. This can increase medical coverage, especially for the very poor who can’t otherwise afford it. But because people get back the money they don’t spend, there are incentives not to overuse medical services, something pro-market politicians can tout.

Over time, it will be necessary to untie these policies from each other. If a carbon tax is effective, it will produce falling returns as carbon-intensive practices are replaced by lower-emissions options (though presumably it would never go to zero). Other types of sin taxes could be levied to make up the difference: alcohol, tobacco, legal drugs, and even certain luxuries. But these taxes would also be revenue neutral, and anyone who spends less than the average citizen on them would see a net gain. And individuals could change their behavior to increase the returns.

Tying spending to taxing is silly, especially in a case like this where the spending isn’t related to the harm trying to be taxed down. However, political reality requires these kinds of kludges to build a coalition that will support their passing. By creating a combined policy that at once addresses climate, health, and inequality, but does so without expanding the decision-making role of government, and bakes in individual freedom and market incentives, it may be possible to build an effective political coalition. And though it isn’t the ideal policy, this would address many social problems that have proven difficult to address separately.

I do think it’s funny you Americans gotta have 2 or 3 laws up at once to get an act passed…

I think there is a hole where the rain gets it, and starts ones mind to wondering.

Good stuff, all and all. About that hole. Luck and misfortune aren’t equally distributed.

Asthma, why the steep incline in incidence? Allergies, same question? Not to mention, birth defects, cancer, autism as well as a broad spectrum of rare and not so rare disorders. These aren’t individual issues one can expect to cover with an HSA. These aren’t health conditions that have reasonable cost associated with them. From smoking to ddt there are costs that are not being accounted for. And as a society we have to account for them one way or another; as well as keep their accounting in the appropriate column.

A corporate entity should not have an individual right. Without it’s shareholders, executives, managers and employees, it is lifeless.

We are fairly well known for making mistakes, but the question of how innocent the mistake, must be asked? Forgive the mistake but ask from where does it come?

How do the notions of capitalism and making, profit, potentially off an others ills, or inabilities, rationalize with the whole notion of not knowing what was done, a mistake and forgiveness?

The idea of “knowing printing” and knowing “this shit” seem differentiated.

I agree, and I think certain types of single-payer insurance are the right way to go in the long run. But those policies just aren’t politically open at the moment (at least not in the US. I should have specified the political climate in which this kludge is necessary; as 1mpious points out, it may not be necessary everywhere).

But even with a broader safety net, the market will probably always be the best way to process and distribute certain kinds of social information. It’s just not possible for a centralized decisionmaker to aggregate all the information necessary to efficiently allocate resources in any practicable timespan.

I also think it’s important not to moralize the results of the market. People can make mistakes and have bad luck, but have a strong incentive to avoid making mistakes influences behavior, and that’s socially valuable.

We have a fairy good track record of taking advantage of people in the market. Perhaps we have not been moralizing the market enough. I recently became aware that Milwaukee, WI is a hub for human trafficking for indentured servitude, sex and slavery. Today? And there appears clearly a market for it.

No, I think the market needs some moralizing. How many times have companies been outed for being aware of the damages their products were causing, and they opted to hide and deceive. The market, as a market, is incapable of policing itself. It has only one criteria; generate profit. The market doesn’t operate in a vacuum. It does not operate independently, free of human actions, and many of those actions and choices have indications to be detrimental to the very capacity the planet has to sustain life. Ground water contamination happens as the result of so much of our industry. Whose water is it anyway? To be fair water contamination happens as result of any species that gathers in too high a concentrated population.

Do we really need to kill 99% of all bacteria? That’s just plain acting without much forethought or clear thinking. The environmental side of the equation is not a moral argument. What sort of measure do these corporations take that increase the incidents of disease? If done knowing full well, and hiding the fact, then that environmental issue becomes a moral one. There is no avoiding it.

Morality has been around longer then the market. Grown up together. It’s high time they start to play with each other.

But above that, an attitude that one can own, and as result, do with as one desires, is a very dangerous attitude to hold about any nature resource. There seems no morality that can stop it. The market operates under far too many fallacies. A prime one being unlimited growth. Far too many companies do harm in it’s pursuit.

In the market it is not rare that the people making the mistakes are not the ones that are paying for them.

An Individual HSA is going no where to cover the cost of having a child with autism, or surviving cancer, given an average income.

Thanks for the info. Mowk, I’m going to research Milwaukee. Man, men, as moral agents overseeing morality makes my skin crawl a bit in light of sex trafficking markets being marketable today as well as all the other immorality being colluded upon by boardrooms of predominantly men, if not all men. (The real deals happen on the golf courses and they’re sealed at the strip clubs. )

Wendy,
Isn’t it a bit simplistic to conclude that immorality is a male thing?

No. Men are the authorities, have always been. Men laid out morality in the daylight, then acted contrary to their own ideals throughout the nighttime. Every age has been the dark ages due to men.

I’ll take this to a thread about the inferiority of men when inspired. Sorry Carleas.

Mowk, I did not mean to imply that we shouldn’t include morality in the structure of the market, but rather that the winners and losers in the market should not be assumed to be the best and worst people (a point on which I think we agree).

Indeed, one can’t have a market without some assumptions about rights that are inescapably moral. What kinds of things can be owned? Who or what can own them? What can one do with the things one owns? How do we make sure people use the same answers to these questions? A market requires a certain underlying legal and social structure to function at all, and that structure will be in many respects a moral one.

That said, we should avoid moralizing where we don’t have to. Outcomes shouldn’t be moralized, because part of the value of the market, what lets it do socially valuable things that can’t be done in any other way, is that it reveals which strategies are best, rather than having that outcome dictated. And that result depends on people’s decisions being able to affect the outcome. If nothing anyone does will affect who has what, peoples decisions are no longer meaningful.

The ideal would be to maximize the meaningfulness of peoples decisions. That includes things like a UBI, because inequality makes peoples decisions less meaningful; since a wealthy person and a poor person value a dollar differently, the higher the inequality, the less you learn from the clearing price of widgets.

And I also see a role for regulation in order to price in certain consequences. The carbon tax would be one way to do that. Again, though, it isn’t taking a hard line, e.g. banning pollution beyond a certain level outright. The goal would be to make polluters have to pay for the harm of pollution, and then let them decide if it’s still worth it. In some cases it would be, but wherever pollution could be reduced in a socially efficient way, it would be (or rather, the people who did so would ‘win’ the market).

As for natural resources, I am not as pessimistic as you about the ability for the market to handle it. Privatizing the resource can be beneficial, because again the market will act as a dousing rod to find the value of the resource.

Sure, but if that stuff isn’t being covered without the HSA, then it’s no criticism of the HSA. The HSA benefits people, especially the poor and vulnerable, even if it doesn’t solve every problem on its own.

So you want to have a new carbon tax, which would translate to higher prices on many goods and services in the broad economy; then take the money collected through the tax and give it out to poor and low middle class people in the form of money for an HSA?

I’ll admit, it’s a pretty creative approach.

However, I reject the basic concepts, so I would also reject combining them together (even if I appreciate your ingenuity here… we need more thinking outside the box). HSAs are the only of your ideas here that I can support.

Carbon taxes are a terrible idea. The solution to global warming and greenhouse gas contributions is not going to come from either strangulating our own economy or deindustrializing (what we need is more research, more technology, more carbon capture and carbon recycling; we need to also re-evaulate the science involved since CO2 can be considered an asset and a resource in the right situations). Higher prices for you and me is only going to cause economic harm on both the consumer and producer end, and lead to only modest decreases of emissions anyway. Not only this, but production and manufacturing will keep shifting to the third world where such taxes do not apply, thereby allowing some companies to keep a supply chain at lower cost to help out-compete American or other western companies that are subject to carbon taxes.

So in essence you get what is already happening with onerous environmental regulations in the west: production and manufacturing shifts to China and similar places, where such regulations do not exist, therefore there is not really a net decrease of pollution at all, and in all likelihood there is a net increase because American production even prior to extremely onerous regulations was still more environmentally clean than typical third world production. So you just shift the burdens around the globe in order to keep prices from rising too much here, but still hurting the western economics, and without making a real impact on emission reductions.

As I said in another thread here, why do you think North Korea and others like it are signing onto the Paris Agreement? Do you really think it is out of benevolent concern for the environment? Fuck no, they see fat dollar signs and increasing statist legitimacy of their already oppressive powers over every aspect of their citizen’s lives.

To the issue of universal basic income, this is one issue that I really can’t stand. Has anyone done the math to figure out how much this would cost? I have. Let me show you:

Number of extreme poor in America: 43.1 million (poverty.ucdavis.edu/faq/what-cu … ted-states)
Actually let’s use this one: Percentage of Americans at either the lowest income tax bracket (10%) or pay no income taxes: around 50% (taxpolicycenter.org/taxvox/w … -americans)
US population: 326,291,926 (worldometers.info/world-popu … opulation/)

Let’s assume that we provide a UBI to only people who are either in extreme poverty or at the lowest income tax bracket of 10% (for annual income of $9,375 or less). This amounts to giving UBI to about 50% of 326,291,926, or 163,145,963.

Now, how much should a UBI pay out? An article I found uses $200 a month as an estimate, although of course that is hardly enough to be considered income (if you earn $50 a week you are not even paying for food, unless you only eat rice and ramen – $50 a week is $7.14 a day, which is $3.57 a meal for two meals a day… yeah, good luck with that). But sure, let’s go with $200, even though I think it is reasonable to assume a number at least twice this big.

$200 a month x12 months x163,145,963 = $391,550,311,200 a year

So the idea is, we spend a new $400 billion dollars a year, which is about 34% of the total federal annual budget, to pay over 150 million people $200 a month so they can afford to go to McDonalds a few times a week rather than just eat rice and ramen?

This is the entire point: we cannot afford UBI. The whole idea is pure shit. Not only at the practical economic level but also at the philosophical level – so we are just going to pay people for existing, for just sitting around breathing? What the fuck? Totally divorcing income from work or effort is madness, that sounds like a swift collapse into total economic ruin. But don’t get me wrong, I want to alleviate poverty and have reasonable welfare safety nets… but not like UBI. UBI is maybe the worst idea I have ever encountered in politics, and it is amazing that the idea is gaining such traction. I suppose there is no real upper limit to the seductive power of virtue signaling.

Not only this, but how are we going to pay for that? More debt? We have 20 trillion dollars of debt already, basically everyone is broke and economic disparities and income inequality are increasing sharply, with the middle class getting shrunk; we have unfunded public liabilities in the quadrillions, and you think we can afford to spend an additional 34% of what is already a basically debt-funded federal budget on giving people a few more bucks in their pocket? I cannot imagine a more insane and useless way to spend money, even if we weren’t already being crushed by debt, which we are.

As for HSAs, yes these are good ideas. I’ve already outlined my idea to replace health insurance with what are basically HSAs only, maybe I will dig it up and post it here. Insurance for health care is a complete scam.

Thanks for your reply, VXZ. Let me try to address some of your concerns.

Carbon Taxes:

You’re right that prices would increase as a result of a carbon tax. But if it’s revenue neutral, and pays out in the form of a UBI, the effect is zero on average. The average person will see their cost increase be perfectly offset by the UBI. But people whose consuming habits produce less carbon emissions than the average person will end up better off: their costs will increase by less than the UBI they receive in compensation. This creates an incentive to reduce carbon emissions.

One way to think of this is in terms of compensating society for the distributed harms done by pollution. Pollution as a byproduct of consumption has the effect of hurting the ‘commons’, while benefiting the individual. This is a tragedy of the commons: a rational person would pollute more than is socially efficient, because the harms is born by everyone while the benefits go only to the individual. By taxing emissions, the harm gets priced in, so that the cost and the benefit are both born by the individual who makes the choice. The rational choice therefore changes, and is closer to the socially optimal choice.

You make a good point about the potential for off-shoring, but I don’t think that’s necessarily as big a problem as you say. Carbon taxes could be levied on imported goods at the time they are imported, thereby reducing the incentive to offshore to avoid the carbon tax.

Universal Basic Income

I’ve written more about this here (using the term BIG instead of UBI, but intending the same thing), but I’ll try to address your points here because I’m not sure if I respond to them all there.

This is using a strangely narrowed definition of taxes. If we look at the effective tax rates in the US, very few people pay zero taxes. The lowest 20% pay on average 2% in taxes. But while I think this criticism is important in reference to a general, unfunded UBI, it seems inappropriate here, where what’s being discussed is a fully-funded, revenue neutral carbon tax and UBI. So tax brackets aren’t relevant, only carbon use (or carbon-use-by-proxy, in the form of consumption).

So what we really need to know is how much a carbon tax will increase the cost of goods, which is hard to say. How much of the use of carbon-intensive consumption is just momentum? For example, refitting a plant to be less carbon intensive, or to use less carbon-intensive materials, may be costly, but how much of that is just the upfront cost of the transition, and will ultimately go back down after the change? One can reason that e.g. in a transition to renewable energy sources, building the windmills or solar farms or what have you is expensive, but energy costs thereafter may be lower than they are currently.

I agree that the UBI is counter-intuitive, but I also think you give it short shrift here. And I think your last sentence is completely backwards: it’s the resistance to UBI that is mostly virtue signaling, arguing that we shouldn’t adopt a UBI because then we’re just giving the lazy goodfornothings free money, and that’s not fair! Let me expand:

We already have a welfare system. We already give people valuable goods and services simply because those people need those services. This is a given. The argument is that UBI does more for the same amount of money already allocated to these programs. The burden isn’t whether we should be giving people things for free, we do that already. The argument is that cash is more efficient and achieves the same goals better.

The reason for that are many, but the two largest make the case:
First, various ways of restricting who can receive benefits imposes significant costs. The process of deciding requires significant overhead. And certain forms of exclusion attach perverse incentives, imposing high effective tax rates as income increases. These costs are probably not recouped by the savings, and a significant part of the money that is intended to be spent on alleviating poverty ends up going to relatively wealthy and well-off bureaucrats who administer it.

Second, the money that actual does go to recipients is worth more. Just as a gift certificate is worth less than the same value of cash, any spending that gets to the recipient in terms of vouchers, goods, or in-kind services is worth less than the value of those vouchers and services in cash. The recipients know better than the government can what their most pressing needs are, and the limited studies we’ve done show that recipients who receive cash spend it better and it in ways that improve their lives over the long term better than goods and services would.

So together, we have more money getting to the recipients because the overhead is reduced, and that money gets to them in a liquid form that is more valuable than it would be in the form of vouchers, goods, and services.

We help people who need it by providing food, clothing, discounted shelter and healthcare, etc. We don’t give them a paycheck. There is quite a difference here.

Welfare nets ought to be limited in duration as well, and focused more on helping people become productive members of society. The problem is that people don’t have jobs or don’t have good jobs. So try to fix that first. Job training programs for example should be connected to receiving welfare benefits, in addition to welfare benefits being short-term only.

The more you pay someone to not do something, the more they are going to not do it. At the point you make UBI enough money to be livable for people at a basic level, you just incentivized people to never work a day in their lives. This is the opposite of a solution. The solution is to help structure society and incentives and benefits in such a way that increases the productivity of people; the UBI idea does the exact opposite and increases the lack of productivity of people by rewarding and subsidizing it.

Plus, if you give UBI rather than food stamps for example, you encourage people to spend their UBI on drugs. Another huge problem, since drug use/abuse is a big problem among the poor.

And as I said, we cannot afford it. Simply can’t. This is just a fact. Even if we cut the budget for the Pentagon in half we would still be nowhere near paying for even the most modest UBI for just the people who would “really need it” (lowest tax bracket for income, or who pay no income taxes). And yes I am aware that everyone pays taxes in some form or another, like sales tax, but a huge number of people make so little income that they get back whatever was withheld on their paychecks to begin with. Insufficient income is a huge problem for lots of people, even if they work one or more full time jobs. So why not redirect more money to restructuring society to improve overall economics, rather than wasting money on giving people a few more cheeseburgers and hits of heroin a month?

I agree.

In one case, the government pays a bunch of bureaucrats to decide what poor people need, then give sweetheart deals to well-connected business who sell food, clothing, and discounted shelter and healthcare, and then give those goods and services to give to people who value them less than the price that was paid for them and who know better than the bureaucrats what they really need.

In the other case, the government just gives everyone a small amount of money. It’s cheap, it’s direct, it’s effective, it’s not infantilizing, and it doesn’t line the pockets of any senator’s friends.

This isn’t what UBI is. UBI is universal, it goes to everyone. Someone who isn’t working is getting it, and keeps getting it even if they get a job. That’s a benefit, because it removes the functionally huge tax rates that are imposed by means-tested programs.

Enabled, perhaps, but not incentivized. Similar to the above, individuals get no more money for staying home than they do for working.

This problem is touted often, but the empirical evidence we don’t bear it out. First, the relationship between drug use and wealth is not straightforward. People seem to try drugs at roughly equal rates, but the wealthy tend to be better able to recover from addition (which stands to reason, as treatment costs money). Second, evidence from the limited studies we have show that people tend to maintain or decrease their spending on drugs and alcohol in the presence of a UBI. Third, we also have evidence more generally that a addictive behavior is exacerbated by a lack of options, something the UBI provides both directly (cash to move to a new city) and indirectly (your neighbors are better able to pay you to shovel snow or garden or babysit).

Again, I think this is generally not true, but here, we’re talking about a fully funded UBI. There’s no question of whether we can afford it, because the proposal is to create a new tax and pay out only what we take in.

This is only true if we don’t include what’s taken out of paychecks for payroll taxes, social security, and the like, which is just a linguistic trick. The effective tax rate for basically everyone is positive, i.e. almost everyone is paying more in taxes than they’re receiving in tax returns.

I agree that this is the aim, but I actually think that a UBI does a better job at restructuring society than other welfare programs. The UBI provides people with autonomy and opportunity. It redistributes wealth and therefore both political power and private sector services. The redistribution is both in terms of putting a greater percentage of social wealth in the bottom, and in terms of moving money from wealthy areas to poor areas. Decreasing government decision making in the domain of social welfare spending decreases rent-seeking and lobbying, and it reduces the size and expense of the administrative state. It structures society in the direction of individual choice.

If this leads some people to working fewer hours (and results on this in real-world experiments are mixed; where people did choose to work less, their time was spent with their families, which probably produces better citizens in the next generation), that isn’t necessarily an evil (as I’ve argued before, a growing percentage of the population will simply be unable to contribute to the economy). And even where it is an evil, the net result is likely to be positive, and to deny society a UBI because certain people will become fully parasitic on society is cutting of the nose to spite the face. Or, as a wise man might call it, “virtue signaling”.

Ah, good to know. Allow me to update the numbers to reflect this.

$200 a month x 12 months x 326,291,926 people = $783,100,622,400 a year.

Yep.

I would not call $783,100,622,400 a year “cheap”, would you?

On the drugs issue, of course there is a relationship here to consider, why do you think food stamps are paid out in such a way that cannot be cashed for… cash? You are required to spend this money only on certain kinds of items, because the government and welfare systems realize that if you just hand a person $100 they’re not necessarily going to spend it on bread and cheese and milk. And if they go buy alcohol or crack with it, then where does that leave your “welfare” system?

But yeah, of course rich people also use drugs. That wasn’t at all my point to claim they don’t. As for the issue of evidence that people decrease spending on drugs and alcohol with UBI, what is this evidence? As for the issue of addictive behavior being exacerbated by lack of options, sure, that is definitely possible in many cases, but again that doesn’t ameliorate the issue one bit. Giving someone $200 a month extra doesn’t exactly free up their options in a significant way if they’re already in poverty. Hell, I am middle class and I basically live in poverty too, due to just the sheer cost of living in this fucking place these days. You really think $200 a month will do it? I say we would need at least $500 a month to make the kind of impact you seem to want (to “increase their options” etc.), in which case we are talking about an annual cost of… well I will let you do the math on that one

And don’t let me forget to point out that you’re making my point for me when you say that a lack of options exacerbates addictive behavior… I was the one who pointed out that drug use/abuse is a big problem among the poor, remember?

You’re talking about $783,100,622,400. Do you get that? That is 783 BILLION dollars every single year. That is over half of the annual budget for the entire federal government. You can’t just tax that out of the system… I’m sure you know how much of the government is funded: not by taxes, but by deficits. This is why balanced budgets are so fucking difficult to get from Washington. Your idea is very silly, that “well we just create a new tax and only pay out what we take in!”, sorry man but that is a fairy tale. If it worked that nice and clean we wouldn’t have $20 trillion in debt right now.

Government cannot even afford to maintain its fighter jets properly, or the interstate highway system, or k-12 education, and you think we can add $783,100,622,400 a year in new spending? Cmon man. Be realistic here.

I’m talking about income taxes, not medicare or social security. And yes, for many people they pay literally NO income taxes. Sure they pay into medicare and social security, but that isn’t income tax. If it was then we would count that as part of our paycheck withholding on our yearly taxes to figure out how much we have already paid into the system, but we don’t do it like that. Social security and mediare taxes are IN ADDITION TO the regular federal and state incomes taxes that are taken out of our paychecks.

And yes, as I said, poor people do still pay certain taxes, like sales taxes. If they earn income then they also pay some social security and medicare taxes too. But any income taxes withheld from their paychecks is just paid right back to them on April 15th.

It’s downright silly to think that taxing something reduces it.
where is the empirical precedent for this? Rephrase: Where does it not work in the opposite way?

Taxing something universally means that the production value decreases so as for profits to be sustained, it never causes accountability to increase. To be taxed sucks, and the human being responds aggressively to reassert his interests. It’s nature, you can’t moralize nature.

If centuries of examples don’t push to the foreground spontaneously, think only of Volkswagen. Carbon taxation caused the once most reliable brand to succumb entirely to corruption in a few years time.

I’m not. You’ve provided some arbitrary minimum that you think a UBI has to be, and you multiplied that by the population. An arbitrary number times a population is an arbitrary number.

Again, the proposal here is to tax carbon in a revenue neutral way. I think a UBI is generally a good idea, and so paying out the net tax revenue from the carbon tax is to my mind an added benefit. But a carbon tax is a good thing even if it weren’t paying out everything it takes in, a carbon tax is an efficient way to encourage people to change their behavior towards cleaner alternatives. Paying out makes it politically palatable.

As for a UBI on its own, as a replacement for our current welfare systems, a recent study from AEI looked at that and found that it’s not nearly so grim as you describe. They find that the net benefit to most people is greater than what people get under the current system (but note that they are replacing Social Security and Medicare, and find that seniors are on average slightly worse off).

Because people think that poverty is a moral failing, rather than a structural one. And they’re basically wrong about that.

Pilot studies in Namibia, India, Kenya, and Uganda found no increase in drug use, and a global study of several basic income grant programs done by the World Bank found generally negative effect on alcohol and cigarette spending.

There is a fallacy at work, whereby people who aren’t poor assume that anyone who is poor must be poor because they’re mentally or morally unable to make the right choices to lift themselves out of poverty. Part of our sense of the world being just requires that we assume that poverty is largely the fault of the poor, so we assume that giving the poor money will just fuel more extravagant poor decisions. But by and large that’s not the case, a significant part of poverty is structural, due to a lack of opportunity and access. Giving people extra cash lets them make decisions to improve their own lives, and where it’s put into practice it’s been shown to be effective: most spending is to the long-term benefit of the recipients, and not primarily hedonistic.

And when I say that it’s cheap, I mean it’s cheap relative to any other kind of welfare. If you want to give out a net social benefit of $700 billion as a UBI, it costs about $700 billion. If you want to give out $700 billion of vouchers, goods, and services, you need to spend much more money because 1) the value a recipient receives is less than the cost of the voucher, good, or service, and 2) vouchers, goods, and services, and selective awards of aid, all have significant bureaucratic overhead.

For goods where there’s a ready alternative that is only differentiated by costs, taxes will obviously decrease consumption. So, for example, if I can buy electricity produced from burning some fossil fuel or electricity produced from some renewable source, taxing the fossil fuel electricity will tend to make the renewable source electricity more appealing.

For other types of goods, increasing costs doesn’t affect consumption as much. For example, a CBO study found that gasoline cost only weakly affected driving behavior. That makes sense: many trips by car aren’t optional, and people who set their lives up around e.g. driving to work every day, will have trouble changing their lives in response to increase in gas prices. However, the same study notes that increasing gas prices do change what kinds of cars people buy, favoring more fuel efficient cars and thus decreasing gas consumption in the long run. So while many behaviors result in ‘sticky’ levels of consumption, over time peoples’ behaviors do change to imperfect substitutes in response to a change in price.

Finally, it often isn’t important that prices change behavior. For example, if we put cigarette taxes to medical costs, even if they don’t change behavior, they fund a liability imposed on society by the behavior. Since pollution has a widespread negative effect that everyone feels, a carbon tax paid out as a UBI will generally compensate everyone for the negative consequences that result from the consumption of carbon.

Seniors can easily make over $1000 a month on social security. Disabled people on SSI can make $800 a month easily, since it’s supposed to help cover rent. Why don’t you provide some numbers here, you are really underestimating the cost of all this.

My “arbitrary” number of $200 a month was chosen based on an article in UBI from The Economist. It’s not arbitrary and choosing a number as a reasonable example doesn’t somehow invalidate the entire cost analysis. I don’t understand how you could possibly think that.

I would think that you consider $200 a month to be too low, especially if you want to replace SSDI and SSI with UBI. You’re basically taking about giving social security to every person in the country. If you don’t like my numbers then the onus is on you to provide counter numbers as to the total cost. It’s easy to do, since it’s easy to find all the numbers you would need to calculate it out.

So first let’s see how expensive welfare and social security are right now, and how many people benefit at what average benefit per person, then compare replacing that with UBI. I’ll work on those numbers later today. I agree with you that administrative costs are a problem, and doing a simple UBI through say the IRS would be way cheaper, at least in theory. But I can’t see that reduction in bureaucratic overhead offsetting the total cost in a meaningful way.

700 billion would represent a significant percentage taken out of total income for everyone paying into the system. I happen to think taxes are already too high on almost everyone, and yes government is a bit too large and far too inefficient.

And your response to the food stamp issue I raised is wrong. We don’t require food stamps to not be used on alcohol and drugs and non-food items because we assume poor people are morally at fault. We do it because it’s common sense that if you give someone $100 for food they’re not necessarily going to spend it on food, or even for basic needs. Giving out cash instead of focused benefits like food stamps would make the welfare system that much more inefficient, since a lot of people wouldn’t even spend the money on what the money is intended for. Buying a PS4 or an iPhone or some marijuana or Jack Daniels doesn’t help alleviate poverty.

I’ll engage your objections in a minute, but first I must again stress that the general criticisms of the cost of a UBI are inapplicable to the policy proposal in the OP. More complete carbon-tax-to-UBI proposals that have been worked out are in the neighborhood of $50 per month per family of four, rising to less than $400 per month per family. And it’s a fully funded proposal, funded entirely by a new tax on carbon. You’re objecting to an unfunded additional benefit nearly an order of magnitude greater than what’s being proposed. Your objections, whatever their validity, are to a different policy that I haven’t proposed here.

Now, to those objections:

Whether you chose it or the Economist chose it, $200 per month is arbitrary. Here is the Economist noting that a town in Brazil is paying a $3 per month basic income. The Alaska Permanent Fund has paid out less than $1,400 annually on average for the 5 years. Global median income, adjusted for purchasing power, is less than $3,000 per year, roughly the level you proposed. It doesn’t seem a given that a UBI must give out more money that half the population of the earth earns.

But on the higher end, the AEI study, which looked at eliminating almost all welfare programs and base-narrowing parts of the tax code (e.g. tax breaks for mortgage interest payments), estimated a payment of about $13,700 per year for adults (they would pay half that to children; I’m not sure that’s my preferred way to do things, but it is a reasonable approach). That’s much higher than your proposal, but it’s funded by eliminating $2.54 trillion in already existing welfare spending, and raising taxes (by eliminating targeted tax breaks) by $649 billion. As you point out, this significant spending, but the vast majority of it is already funded, and the additional taxes fall significantly more heavily on the wealthiest (those earning over $1 million per year).

And it doesn’t include additional spending already in place for employer-funded health insurance, which presumably would also be cut. Various base-narrowing tax expenditures that benefit corporations could also be cut. We could cut additional government programs that are at least partially justified as worker benefit programs. For example, farm subsidies would be less necessary, since individuals are given cash to better afford the price of food, and vulnerable farmers have an additional safety net in the UBI.

But I still think their payout is much too high. Again, $3,000 per year is the global median income, a UBI at that level already means that every citizen in the US earns more than half the population of the earth. There’s this weird notion that a UBI has to be a living wage, and there’s no reason to take that position. $2 a day (roughly $700 per year) allows a person to scrape by in squalor (I know from experience that a can of sardines and roll is less that $2 in a city with an extremely high cost of living relative to the national average, and that’s enough nutrients to prevent starvation). And that could be had in exchange for many fewer already existing welfare programs.

A more politically feasible way to implement a UBI would be introduce it at a very low level, and gradually scale back welfare programs and transfer the spending into the UBI. Over time, the UBI could be grown as dependence on welfare programs decreases, and as cash is moved into poor communities, creating small but real opportunities for their residents ($2 dollars a day per person adds almost a million dollars of additional spending per day to the Flint, Michigan metro area).

To vouchers (like food stamps): first, do we agree that a voucher is worth less than its face value? So that by providing people with food vouchers, we’re immediately eliminating a significant amount of the value of the money we’re spending?

To avoid this, and still try to salvage a limitation on irresponsible spending, we could try to create a magic voucher that individuals could spend on anything responsible and not on anything irresponsible. But that line is hard to evaluate. Let’s say a recipient wants to host a barbecue and buy beer for her guests, is that a responsible or irresponsible use (keeping in mind that happy hours are among the most common networking events that create valuable interpersonal connections and social spillover)?

Better is to look at the size of the actual problem. Yes, some people will spend cash foolishly and self-destructively. But he evidence doesn’t support the notion that most will, and indeed, the sources I provided showed quite the opposite, that spending on vices stayed level or went down with the introduction of a basic income. The evidence we have from UBI-like programs does not support the concern that a significant percent of UBI receipts would go to alcohol, drugs, or other vices. People know what they need, they know it better than bureaucrats trying to tailor vouchers to what they think recipients need. Cash is more valuable and benefits people more, and abuse is just not that big a concern. The limitations exists, e.g. food stamps instead of cash, are based not in empirical evidence, but in politics and bias.

Let me check my can of sardines …

120 calories

The general consensus is that men require a minimum of 1800 calories per day and women require a minimum of 1200 calories per day - less than that and your body goes into starvation and ultimately shutdown mode.

hc-sc.gc.ca/fn-an/food-guide … _1-eng.php

You do the math. LOL

A calorie counter I am not, and I love me some sardines, so chalk that up to wishful thinking . But several sources provide plenty of options for getting a days’ worth of calories for $2 or less, see for example here (and to clarify, I’m not suggesting eating lard, but rather the real foods listed, like peanut butter, rice, potatoes, milk, beans, pasta, etc.).