The General Economics Thread

In the USA people still whine and whine about the welfare programs we already have. There's no way in hell we're going to get UBI in my lifetime.

@Morningstar 1337: There are many hurdles that need to be overcome if you want to implement a basic income. So much so that I have even split this up into collapsible sections so that this post doesn't become too bloated. Sorry if it does anyway.

So yeah. I hope you found that useful as primer for UBI, even if most of this stuff is probably irrelevant from a practical perspective.

Maybe they will whine less if they also get a cheque as well as those dirty black poor people who evidently don't know how to be proper hardworking citizens?

I think the Georgist perspective has a lot going for it as far as the UBI is concerned. Sure, you COULD just issue currency to cover the UBI, but that's somewhat less feasible under your typical MMT/Post-Keynesian models than just raising land taxes and keeping the option of net spending/net collecting as discretionary as possible as well as not promising a linear increase to the money supply in case it becomes untenable. It's not like welfare where the amount of money it costs varies dramatically depending on the economic climate, you can fairly easily do a straight population projection for a decade and work out expected costs.

I support not counterbalancing the Job Guarantee with new taxes, but a UBI would be a different beast. I don't see why it couldn't replace some current transfer programs, although probably not all.

They do get those checks. They are whining about the fact that they can't stop non-white people from getting those checks too. Sure, they use dogwhistles like "welfare queens" and what not, but what they really mean is clear.

edited 27th May '18 7:55:28 AM by M84

Wait, even some unemployed Americans are against welfare because some of the money goes to minorities? I assumed it was mostly your usual middle-class and upper working class racists who have jobs and don't want to lose a penny of the money to hypothetical minorities.

I guess I shouldn't be surprised when a significant portion of our working class in the UK like to shoot themselves in the foot every few years by voting Tory, but christ.

Isn't there a quote about racists emptying their pockets or something? I'm certain there was a quote to that effect.

It doesn’t help that American government support is stupidly complicated, half of it’s done as tax rebates (god I love pay as you work), so you get racists who don’t realise that they’re on wealfare because they consider welfare to only be some very specific programs that they don’t use.

Class has always been a much weaker source of solidarity in the US then race, religion, culture and etc. That's mostly because leftover rugged pioneer individualism and the myth of American Egalitarianism mixing in with standard xenophobia. It makes working class solidarity very difficult to cultivate with in the US, but where heading off topic here.

I think you would still want to keep things like old-age and disability pensions, as well as family/ childcare allowances. Other kinds of cash transfer and cash-like voucher programs can probably be done away with. Things like unemployment or wage insurance can probably be downsized into a voluntary Ghent System, which would not only reduce it's cost, but would be a huge boon to unions and labor organizations as they would have something else to attract membership and encourage solidarity with.

It also distorts how much the US really pays on social spending and how ineffective it is.

edited 27th May '18 8:42:20 AM by Mio

Judging by the complete clusterfuck the Government made out of rolling our six welfare programs together into Universal Credit I'd rather have things too complicated than too simple. Then again, they don't like benefits full stop, so it might have been partly intentional.

Of course you'd keep disability allowances and pensions, although if you're regulating private pensions properly you might make a state pension a bit vestigial at that stage.

A universal income would be considerably harder to fuck up like universal credit, because it's paid to everyone without exception. No meetings, no random criteria, no sanctions. And if anyone with half a brain was in charge of implementing it—which it would have to be, because I cannot see anyone else managing to start the thing—you'd have the foresight to not cancel all other benefits and have a waiting period in the middle.

Well, it was an abysmal mess mostly because of the extremely harsh tests. Would be a spectacular feat of incompetence to mess a UBI up the same way.

Saying "we'll phase out normal benefits X months after the UBI program is stable" is also an incentive for the various right-wing local councils not to mess with stuff in the meantime.

People who learned on their mothers knee that you should work hard for every good thing in life hate charity of any kind, even for themselves. They dont believe that people of color start out with severe disadvantages, so they dont get how that attitude perpetuates discrimmination.

I'm actually not sure that I'd want to keep old-age or disability pensions under a UBI, or at least not add new people onto the plan. A UBI gives everyone a living income, so the specific need for disability (and to a lesser extent, Social Security^note though part of the point of Social Security is to disincentivize working full time as a senior, thus pulling the elderly out of the labor market) is removed.

Actually, a UBI would be a great help in clearing out a lot of separate benefit structures and replacing them with a single one. For example, we could phase out minimum wage, disability pensions, and food stamps, and possibly replace unemployment insurance with a Ghent system (if we could repeal right-to-work, which is a stumbling block in getting that done in America). If I were a Democratic Congressional leader, it's the kind of thing I might try to sell to Rand Paul (in hopes that he actually has a Libertarian bone in his body).

If you're planning for a living-wage UBI then yes, you need to get rid of those things, but in order for it to be halfway politically (or even economically) feasible in a place like the UK I'd start with a Job Guarantee and a small UBI. As automation advances, you progressively increase the UBI and maybe shorten the hours of a max-time JG job until you can pay living UBI and drop the JG entirely.

So you'd need to keep the disability and old-age pensions for a while, although they could be made less generous. This is very much the kind of thing you sell to libertarians, since it allows everyone to have sufficient money, time and choice as to where to sell their labour and direct their consumption.

It's very unlikely that initial UBI implementations would provide anything close to a living wage (most common proposal of $1000.00 a month would be barely above poverty in many areas). Until it genuinely gets to living wage levels you'll want to keep them around, which I expect would only be if we reach a critical level of low labor need.

Also getting rid of the minimum wage with labor bargaining as low as it is is a recipe for ensuring that people's wages never go up and are just eroded away by inflation. We would probably need Scandinavian levels of union power and representation before we can even consider that (something that a Ghent System would help with, but that's something else that would require a lot of work).

If UBI is something a person can live on than you don’t need a minimum wage for said people, because they can just quit if they don’t get decent pay.

Thing is who gets UBI? If you aren’t giving it to children and non-citizens than you still need minimum wage laws to protect thouse two groups from exploitation.

The easiest way to start UBI might be to have it takeover from existing state pensions, so instead of a state pension do social security you just get UBI once you’re over a certain age, then you age can be lowered bit by bit. This could also help free up workforce space as older people would be able to leave the workforce and live on their UBI.

Speaking for myself, I managed to get by on $1,000 a month plus $1,000 to $2,000 (in Alaska, where prices are significantly higher than elsewhere), but I also had effectively low-income housing and food stamps. I'd start with $1,500 a month for everyone, with possibly a Cost Of Living Adjustment for Alaska and Hawaii.

Children would have their UBI or something equivalent given to their parents for their support, so child labor would not be necessary.

Noncitizens are a thornier issue. Umm. Obviously, we can't help illegal immigrants there, but then they don't get minimum wage either. Student visas don't need minimum wage. Work visas do, but then they'd have to compete against citizens who don't have to be paid minimum wage. So UBI would clearly disadvantage imported workers.

Hm. How do Saudi Arabia and the UAE handle their guest-worker programs (when they're not laughing at the very concept of human rights, that is)?

Badly, I imagine.

There is no “when they’re not laughing at the very concept of human rights” for low skill guest work in the Gulf. High skill guest workers are there for one specific job that they line up before coming, but that’s different.

Also I’m not just talking about guest workers and such, what about green card holders? Do they get UBI?

edited 30th May '18 5:42:56 AM by Silasw

The simplest answer would be yes, but then we'd have to limit immigration, which is something I don't like if it can be avoided.

Hm. Set up a guest-worker-to-immigrant program where, after (say) five-to-ten years of working in the US, a guest worker could apply for permanent residency? If we can ensure that (for example) agricultural guest-workers aren't abused beyond the fact that picking crops is sucky work no matter how you slice it, it might be a good fix for our current system.

Personally I'd rather we encourage all the various crappy farm companies in the US and UK to pay decent wages and/or replace crappy jobs with better-paying jobs managing the fruit-picking beep boops, but that would again require restrictions on immigration or a Job Guarantee, and the JG requires restricted immigration or they will all flock to guaranteed work in Britain.

The thing to remember about any sort of JG or MBI is that for every beneficiary you add, you get a corresponding boost to your consumer economy as these people spend their new income. Your ultimate limitation isn't money, it's whether you can produce enough stuff to satisfy the increased demand without skyrocketing inflation. There are also housing and infrastructure limitations to consider: it takes time to construct homes, build roads, recruit and train police, doctors, firefighters, teachers, etc. We don't want to have work gangs of second-class citizens crammed into stockyards.

It's true that a job guarantee runs into the problem of finding useful work for each person to do, no matter how menial, and it also faces the issue of dealing with those who can't work for whatever reason (disability, age, dependent care burden, etc.). Conversely, minimum basic income can have disruptive effects on a society that's conditioned to value gainful employment.

In terms of overall problems, immigration falls into a third or fourth place.

edited 5th Jun '18 7:31:56 AM by Fighteer

Another problem that ties in with Fighteer's point above in regards in BMI is resources. Right now, we aren't in a post-scarcity society and if we lift everyone up to a certain level, even on a regional scale, there will be a great up tick in the use of resources, from food, to electricity, to fuel, building materials, etc. And we need to make sure we are capable of handling it, or on our way to building ways to handle it.

edited 5th Jun '18 9:08:27 AM by tclittle

I’d rather have the disruptive effects of UBI since I believe the change to societal norms will be necessary going forward in to a more automated future.

At the moment though we may be reaching the economic “overheating moment” if the truckers shortage turns out to be as big a deal as I’ve been hearing.

We have more then enough resources, it’s mainly a matter of distribution, which is something a UBI’s funding structure should help with.

Nonetheless there are indeed some structural problems we should deal with before we go with a UBI.

Completely agree there, although to be honest I think we could handle a job guarantee fairly well at the moment, unemployment is fairly low, a whole bunch of public services have been gutted (and thus can employ more people helping to rebuild and staff them) and Britain is still stuck in a demand/growth slump thanks to austerity after 2008. All the growth is coming from increasing private sector debt, and since we already have so much of that it will be slow until the government once again remembers what it is for. Admittedly a lot of those jobs reducing the unemployment rate are terrible and people might leave them for a full-time JG job. Would have to do a pilot study.

I keep trying to get people to understand that when they keep going on about the deficit. The money is not the constraint, the constraint is resources. If anything, the money used on government programs is like waste heat, it gets out into the economy and could cause inflation if you're running at near-max demand and thus must be taxed back again, since you can't get away with paying people temporary money.

In terms of resources then yes, you'd see more consumption if we set up a JG/UBI, but we're currently running well under optimal levels of consumption anyway, and I'd rather take the disruption and possible inflationary spike until we get it stabilised now, when the inflation can do us some good by eating debts and will be easy to contain. No wage-price spiral in today's climate.